Oil prices fell 1% on Dec. 6 and were headed for a weekly loss, as analysts continued to forecast a supply surplus in 2025 despite the OPEC+ decision to postpone planned supply increases and extend deep output cuts to the end of 2026.

Brent crude futures were down 72 cents, or 1%, to $71.37/bbl at 1415 GMT. U.S. West Texas Intermediate crude futures were down 72 cents, or 1.05%, to $67.58/bbl.

For the week, Brent was on track to fall 2.07%, while WTI was on course for a 0.62% drop.

"Crude oil trades lower for a third day and it highlights what would have happened if OPEC+ had decided to go ahead with the production increase," said Ole Hansen, head of commodity strategy at Saxo Bank.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies on Dec. 5 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.

"Another delay, which we would not rule out, would leave the market broadly in balance next year. While OPEC+'s decision to hold off strengthens fundamentals in the near term, it could be seen as an implicit admission that demand is sluggish," said analysts at HSBC Global Research.

Pressuring prices on Dec. 6, analysts reiterated expectations of a supply surplus next year, although some of them now view a smaller surplus than before.

Bank of America forecasts increasing oil surpluses to drive Brent to average $65/bbl in 2025, while expecting oil demand growth to rebound to 1 MMbbl/d next year, the bank said in a note on Dec. 6.

HSBC, meanwhile, now expects a smaller oil market surplus of 0.2 MMbbl/d, from 0.5 MMbbl/d previously, it said in a note.

Brent has largely stayed in a tight range of $70/bbl to $75/bbl in the past month, as investors weighed 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.

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