Oil rises on upbeat demand growth estimates for 2024, ET Auto

Brent crude futures rose on Friday and were on track for their best week in more than four months, following forecasts for crude oil and solid fuel demand in 2024.

Brent crude futures were up 53 cents at $83.28 a barrel by 1356 GMT. U.S. West Texas Intermediate (WTI) crude futures were up 41 cents at $79.03.

Brent and the US benchmark gained nearly 4.5% for the week. This would mark Brent’s biggest weekly rise in percentage terms in the week to 9 February. WTI is on track for its biggest weekly gain in the week to April 5.

Prices fell last week after the decision by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to phase out production cuts starting in October.

But sentiment changed this week after the International Energy Agency (IEA), the US Energy Information Administration (EIA) and OPEC updated their views on the global oil supply and demand balance for 2024.

While the EIA slightly improved its oil demand growth estimate, OPEC stuck to its forecast of relatively strong growth of 2.2 million barrels per day (bpd). Meanwhile, the IEA cut its demand growth forecast to below one million bpd.

However, all three forecasters predicted a supply shortage at least until the beginning of winter, Commerzbank analysts pointed out.

However, this week’s 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.