2023.12.0119:23:00UTC+00Oil Futures Settle Sharply Lower

Crude oil prices fell sharply on Friday, extending losses from the previous session, amid mounting skepticism over OPEC+ output cuts.

Oil prices are weighed down by a lack of firm commitment to the 2.2 million barrel per day cut decided by the Organization of Petroleum Exporting Countries and its allies.

West Texas Intermediate Crude oil futures for January ended lower by $1.89 or about 2.5% at $74.07 a barrel.

Brent crude futures were down $1.73 or 2.14% at $79.13 a barrel a little while ago.

Following today's loss, oil prices have now recorded a sixth straight week of declines.

Saudi Arabia has committed to extending its one million barrel cut until the end of March, and Russia has increased its export reduction from 300,000 to 500,000 barrels.

There are concerns that OPEC+ might find it tough to follow through and reduce output, as the output cuts announced are voluntary and not mandatory.

Craig Erlam, Senior Market Analyst at OANDA UK& CMEA is of the view that traders "aren't buying that members will be compliant or don't view it as being sufficient."

"The lack of formal commitment hints at fractures within the alliance which could impact its ability to hit its targets, let alone cut further if necessary. If Brent breaks below its November lows, it will be perfectly clear what markets think of the deal," Erlam adds.