Oil prices fell on Friday but were on track for their first weekly gain in four weeks as markets weighed the impact of higher and longer U.S. interest rates against the robust outlook for demand for oil. crude oil and fuel this year.
Brent crude futures were down 72 cents, or 0.87%, at $82.04 a barrel at 0100 GMT. U.S. West Texas Intermediate (WTI) crude futures lost 79 cents, or 1%, to hit $77.84 a barrel, reversing small gains from the previous session.
In a see-saw week, oil prices rose after the Organization of the Petroleum Exporting Countries (OPEC) maintained its forecast of relatively strong growth in global oil demand for 2024 and Goldman Sachs forecast solid demand for fuel in the United States this summer.
That helped reverse the previous week’s losses, caused by an agreement between OPEC and its allies, together called OPEC+, to begin tapering production cuts after September.
Further supporting the market, Russia pledged to meet its production obligations under the OPEC+ pact, after saying it exceeded its quota in May.
“Stricter adherence to current quotas should more than offset any potential increase by the Group of Eight as part of the phasing out of voluntary cuts. As such, the crude oil market should remain well supported over the next 18 months,” ANZ analysts said in a note to clients.
However, prices fell after the US Federal Reserve kept interest rates on hold and postponed the start of rate cuts to December, with comments from Fed officials fueling concerns that economic growth can slow down and curb fuel demand.
The market will be keeping an eye on a series of stock reports in China, the world’s second-biggest oil consumer, to be released on Friday which ANZ analysts say are expected to reveal possible weakness in demand for energy and metals . (Reporting by Katya Golubkova in Tokyo; Editing by Sonali Paul)
