Dec 6 (Reuters) - Oil prices dipped on Friday, with weak demand in focus after the OPEC+ group postponed planned supply increases and extended deep output cuts to the end of 2026.
Brent crude futures were down 20 cents, or 0.3%, to $71.89 per barrel at 0910 GMT. U.S. West Texas Intermediate crude futures were down 14 cents, or 0.2%, to $68.16 per barrel.
For the week, Brent was on track to fall 1.5%, while WTI was on course for a 0.2% gain.
The Organization of the Petroleum Exporting Countries and its allies on Thursday pushed back the start of oil output rises by three months until April and extended the full unwinding of cuts by a year until the end of 2026.
The group, known as OPEC+ and responsible for about half of the world's oil output, was planning to start unwinding cuts from October 2024, but a slowdown in global demand - especially in China - and rising output elsewhere have forced it to postpone the plan several times.
"The outcome of the latest meeting of OPEC+ members surprised us positively ... The extension of the production cuts shows the group remains united and is still targeting to keep the oil market in balance," UBS analyst Giovanni Staunovo said.
In contrast to market expectations, UBS expects falling oil inventories this year and a closely balanced market in 2025 to support prices over the coming months, Staunovo added. UBS forecasts Brent to average $80 next year.
Brent has largely stayed in a tight range of $70-75 per barrel in the past month, as investors weigh weak demand signals in China and heightened geopolitical risk in the Middle East.
"The general narrative is that the market is stuck in its rather narrow range. While immediate developments might push it out of this range on the upside briefly, the medium-term view remains rather pessimistic," PVM analyst Tamas Varga said.
Morgan Stanley raised its Brent price forecast to $70 per barrel for the second half of 2025, from $66-68 a barrel, noting that the updated OPEC+ production agreement tightened its supply and demand outlook, especially for the second half.
Still, Morgan Stanley estimates an oil market surplus in 2025, although smaller than before.
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Shipping traffic through the Strait of Hormuz remains limited on Thursday, with no increase in vessel crossings as U.S.-Iran talks to resolve the conflict remained stalled. Nine commodity vessels transited the key waterway on Wednesday, unchanged from the previous day, according to Kpler data.
Shipping through the Strait of Hormuz has slowed, according to the latest data, as uncertainty over the waterway’s reopening kept most shipowners away. Six commodity vessels crossed the strait on Tuesday, down from nine the day before and below the 10-day daily average of 11.
Iran has said the Strait of Hormuz will remain closed until the U.S. fulfils the terms of an interim deal, including lifting the maritime blockade and sanctions and releasing Iran’s frozen assets.
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