Oil up 4pc for the week after solid demand forecasts
Business
It is highest weekly increase since April
NEW YORK (Reuters) – Oil futures prices settled slightly lower on Friday after a survey showed deteriorating US consumer sentiment, but prices rose 4 per cent for the week as investors weighed forecasts for solid demand for crude oil and fuel in 2024.
Brent crude futures settled down 13 cents at $82.62 a barrel, while West Texas Intermediate (WTI) US crude futures were down 17 cents at $78.54.
Brent and the US benchmark gained nearly 4pc over the week, highest weekly rise in percentage terms since April.
Both benchmarks slipped after a survey showed US consumer sentiment weakened in June to a seven-month low.
"The data came in way lower than expected," said Bob Yawger, director of energy futures at Mizuho. "That implies the average consumers don't have confidence the economic situation is improving."
Losses were limited by forecasts for strong demand.
The US Energy Information Administration (EIA) upgraded its oil demand growth estimate for 2024 slightly, and the Organization of the Petroleum Exporting Countries (OPEC) stuck to a forecast for relatively strong growth of 2.2 million barrels a day (bpd).
The International Energy Agency (IEA) meanwhile cut its demand growth forecast to under 1 million bpd.
However, all three forecasters predicted a supply deficit at least until the beginning of winter, Commerzbank analysts highlighted.
Also this week, the Federal Reserve kept US interest rates on hold, and investors believe rate cuts are unlikely before December.
"In view of the still uncertain economic outlook for the major economic regions, a further price increase is not to be expected for the time being," said Commerzbank analyst Barbara Lambrecht.
The US active oil rig count, an early indicator of future output, fell by four to 488 this week to its lowest since January 2022, energy services firm Baker Hughes said.
Elsewhere, Russia pledged to meet its output obligations under the OPEC+ pact after saying it exceeded its quota in May.
Prices dipped last week after OPEC and its allies said they would phase out output cuts starting from October.
"No matter how many times it promises to make up for poor compliance at a future date, the market just sees more oil and an agreement that might just possibly unravel," said PVM analyst John Evans.
Market focus is also on Gaza ceasefire talks, which could alleviate concerns about potential disruption to oil supply from the region.
Money managers raised their net long U.S. crude futures and options positions in the week to June 11, the US Commodity Futures Trading Commission (CFTC) said on Friday.
