Oil prices remained relatively steady on Friday and are on track for their most significant weekly gain in over two months, buoyed by optimistic forecasts for crude oil and fuel demand.
By 10:03 GMT, Brent crude futures saw a slight decrease of 19 cents, or 0.23%, bringing the price to $82.56 per barrel. Meanwhile, West Texas Intermediate (WTI) US crude futures fell by 32 cents, or 0.41%, settling at $78.30 per barrel. Throughout the week, both benchmarks have achieved nearly a 4% increase.
This price boost was largely driven by the Organization of Petroleum Exporting Countries (OPEC) maintaining a strong growth forecast for global oil demand in 2024, coupled with Goldman Sachs’ projection of robust US fuel demand for the summer. The International Energy Agency (IEA) also contributed to the optimistic outlook by predicting that oil demand will peak by 2029 and stabilize around 106 million barrels per day by the decade’s end, as noted in a report released on Wednesday.
However, the upward trend in oil prices was tempered after the US Federal Reserve decided to hold interest rates steady, with expectations of rate cuts postponed until at least December. According to Commerzbank analyst Barbara Lambrecht, given the ongoing economic uncertainties in major regions, significant further increases in oil prices are unlikely at this time.
Additionally, Russia reaffirmed its commitment to meeting its production targets set by the OPEC+ agreement, despite having exceeded its quota in May. PVM analyst John Evans noted market skepticism, suggesting that repeated promises to compensate for non-compliance may cause concerns about oversupply and the potential fragility of the agreement.
Market attention also turned to Gaza ceasefire talks, which could ease worries about disruptions in oil supply from the region. A senior US official expressed concerns about escalating tensions on the Israel-Lebanon border, emphasizing the need for specific security measures beyond a Gaza ceasefire.
