Oil prices set for best week in four months on demand outlook

REUTERS: Brent oil futures prices were steady yesterday and on course for their best week in more than four months after solid projections for crude oil and fuel demand.
Brent crude futures were up 38 cents, or 0.46 percent, at US $ 83.13 a barrel by 1210 GMT. West Texas Intermediate (WTI) U.S. crude futures gained 27 cents, or 0.34 percent, to US $ 78.89.
Brent and the U.S. benchmark had gained almost 4.5 percent over the week. That would mark Brent’s highest weekly rise in percentage terms since the week to February 9. For WTI, it was the biggest since the week to April 5.
Price support came from the Organisation of Petroleum Exporting Countries (OPEC) this week after it stuck to a forecast for relatively strong growth in global oil demand for 2024 while Goldman Sachs projected solid U.S. fuel demand this summer.   The International Energy Agency, meanwhile, expects oil demand to peak by 2029, levelling off 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 U.S. Federal Reserve kept interest rates on hold, with the start of rate cuts 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.
Elsewhere, Russia pledged to meet its output obligations under the pact among the OPEC+ group of producers after saying it exceeded its quota in May.

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