Oil prices were set for their best week in two months on demand

By Robert Harvey

LONDON (Reuters) – Oil prices were steady on Friday and are on course for their best week in more than two months after strong forecasts for crude and fuel demand.

Brent crude futures were down 19 cents, or 0.23 percent, at $82.56 a barrel by 1003 GMT. U.S. West Texas Intermediate (WTI) crude futures lost 32 cents, or 0.41%, to settle at $78.30.

Brent and the US benchmark gained nearly 4% on the week.

Support for prices came from the Organization of the Petroleum Exporting Countries (OPEC) this week after it met forecasts for relatively strong growth in global oil demand for 2024, while Goldman Sachs forecast solid US demand for the fuel this summer.

Meanwhile, the International Energy Agency expects oil demand to peak by 2029, stabilizing at around 106 million barrels per day (bpd) towards the end of the decade, it said in a report on Wednesday.

However, this week’s price rally cooled somewhat after the US Federal Reserve kept interest rates on hold, with the start of rate cuts unlikely before December.

“Given the still uncertain economic outlook for the major economic regions, no further price increases are expected for the time being,” said Commerzbank analyst Barbara Lambrecht.

Elsewhere, Russia pledged to meet its production obligations under the OPEC+ pact after it said it exceeded its quota in May.

“No matter how many times he promises to make up for weak compliance at a future date, the market is just seeing more oil and a deal that may fall apart,” said PVM analyst John Evans.

The market’s focus is also on ceasefire talks in Gaza, which could ease concerns about a potential disruption to oil supplies from the region.

The US is very concerned that hostilities on the Israel-Lebanon border could escalate, a senior US official said, adding that specific security arrangements were needed for the area and that a ceasefire in Gaza was not enough.

(Reporting by Robert Harvey in London and Ashitha Shivaprasad in SingaporeAdditional reporting by Katya Golubkova in Tokyo Editing by David Goodman)