Oil prices on track to gain the week on strong demand outlook

Oil prices on track to gain the week on strong demand outlook
Oil prices on track to gain the week on strong demand outlook

Oil prices fell on Friday but were on track for their first weekly rise in four weeks as markets weighed the impact of higher and longer U.S. interest rates against the strong outlook for crude oil demand and of fuel this year.

Brent oil futures were down 72 cents, or 0.87%, at $82.04 a barrel by 0100 GMT. U.S. West Texas Intermediate (WTI) crude futures lost 79 cents, or 1%, to trade at $77.84 a barrel, reversing small gains from the previous session.

In an up-and-down week, oil prices rose after the Organization of the Petroleum Exporting Countries (OPEC) maintained its forecast for relatively strong growth in global oil demand for 2024 and Goldman Sachs forecast a Solid U.S. fuel demand this summer.

This helped reverse losses suffered the previous week following an agreement between OPEC and its allies, united as OPEC+, to begin ending their production cuts after September.

Russia has committed to meeting its production obligations under the OPEC+ pact, after saying it had exceeded its quota in May, helping to support the market.

“Stricter adherence to current quotas should more than offset any potential increases from the Group of Eight as they phase out their voluntary reductions. The crude oil market is therefore expected to remain well supported over the next 18 months,” ANZ analysts said in a note to clients.

Prices fell, however, after the U.S. Federal Reserve held interest rates steady and pushed back the start of rate cuts to December, with comments from Fed officials fueling concerns about slowing economic growth and a decline of fuel demand.

The market will be paying attention to a number of inventory reports in China, the world’s second largest oil consumer, due to be released on Friday, which ANZ analysts say should reveal any weakness in oil demand. energy and metals. (Reporting by Katya Golubkova in Tokyo; Editing by Sonali Paul)

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