Oil on Track for Best Week in Two Months Due to Demand Outlook

Oil prices were edging lower this Friday but remained on track for their best week in over two months, thanks to strong demand forecasts for crude and fuel.

Brent futures fell 19 cents, or 0.23%, to $82.56 per barrel, while West Texas Intermediate (WTI) futures in the United States dropped 32 cents, or 0.41%, to $78.30 per barrel.

Both benchmarks have gained nearly 4% over the week.

This week, the Organization of the Petroleum Exporting Countries (OPEC) maintained its forecast for relatively strong global oil demand growth for 2024, while Goldman Sachs predicted robust fuel demand in the United States this summer.

Additionally, the International Energy Agency (IEA) expects oil demand to peak in 2029 and stabilize around 106 million barrels per day (bpd) by the end of the decade, according to a report released on Wednesday.

However, this week’s price rally cooled slightly after the Federal Reserve left interest rates unchanged, making it unlikely that rate cuts will begin before December.

Given the uncertain economic outlook in major economic regions, a further price increase is not expected at this time. Meanwhile, Russia has pledged to meet its production commitments under the OPEC+ agreement after stating it had exceeded its quota in May.