FX.co ★ Oil Extends Losses to Begin the Year

On Friday, West Texas Intermediate (WTI) crude oil futures experienced a decline of approximately 1%, settling at around $56.9 per barrel. This downturn is attributed to worries about an increasing global supply surplus that have overshadowed the rising geopolitical tensions. As oil demand typically sees a seasonal decrease, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) are expressing caution. Major producers, particularly Saudi Arabia, are likely to confirm a halt in supply increases for the first quarter during their forthcoming meeting on January 4. Oil prices are projected to remain weak through 2025 as both OPEC+ and non-OPEC countries, including the United States and Guyana, ramp up production in contrast to cooling demand growth. According to the International Energy Agency, this year is expected to see a surplus of roughly 3.8 million barrels per day, which is likely to mitigate any significant price fluctuations resulting from supply disruptions.