Oil Prices May End the Week in Green

14 Jun 2024 , 08:55 AM

While the markets evaluated the impact of higher-for-longer U.S. interest rates vs positive outlooks for crude and fuel demand this year, oil prices dropped on Friday but were still on track for their first weekly gain in four weeks.

Brent crude futures were down 72 cents, or 0.87%, to $82.04 per barrel. After making minor gains the previous session, West Texas Intermediate (WTI) U.S. crude futures fell 79 cents, or 1%, to trade at $77.84 a barrel.

After a volatile week, oil prices rose after analysts predicted robust U.S. fuel consumption and the Organisation of Petroleum Exporting Countries (OPEC) held to its estimate of relatively strong growth in global oil demand for 2024.

Due to an agreement by OPEC and its allies, collectively known as OPEC+, to begin unravelling its output cuts after September, that helped to recoup losses from the previous week.

Russia promised to fulfil its output commitments under the OPEC+ agreement, boosting the market even more after claiming to have surpassed its quota in May.

However, prices dropped when the US Federal Reserve kept interest rates unchanged and postponed the beginning of rate reductions until December. This was due to concerns raised by Fed members’ remarks that a slowdown in economic development would reduce demand for gasoline.

Due to be released on Friday, several inventory reports from China, the second-largest oil consumer in the world, will be closely watched by the market.

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