Optimistic demand outlook, crude oil set to achieve its best weekly performance in over two months
Benchmark oil prices are set to achieve their best weekly performance in over two months, as the market holds an optimistic outlook on the demand prospects for oil and fuel. Both Brent crude and WTI crude have seen gains of over 3% this week, marking the best week since April 5th. The Organization of the Petroleum Exporting Countries (OPEC) forecasts a relatively strong growth in global oil demand by 2024, while Goldman Sachs expects robust fuel demand in the U.S. this summer. Russia has pledged to fulfill its production obligations under the OPEC+ agreement, providing further support to oil prices. Improved demand prospects and OPEC+ production discipline have helped reverse the downward trend in oil prices. The price of oil may be influenced by changes in demand during the summer in the Northern Hemisphere
According to the Wisdom Financial APP, the benchmark price of crude oil is set to achieve its best weekly performance in over two months. This is due to the optimistic outlook on the demand for crude oil and fuel, despite the softening of oil prices on Friday due to the delayed expectations of a rate cut in the United States.
As of the time of writing on Friday, Brent crude oil futures fell by 42 cents to $82.33 per barrel, a decrease of 0.5%. WTI crude oil futures fell by 51 cents to $78.11 per barrel, a decrease of 0.7%.
However, both Brent crude oil and WTI crude oil have risen by over 3% this week, marking the best performance since April 5.
The Organization of the Petroleum Exporting Countries (OPEC) continues to forecast a relatively strong growth in global oil demand by 2024, with Goldman Sachs predicting that fuel demand in the United States will remain strong this summer.
This has helped reverse the downward trend in oil prices. Last week, after OPEC+ announced the extension of voluntary production cuts until the end of September this year, followed by a gradual phase-out of the cuts depending on market conditions, international oil prices fell instead of rising. This reflects the market's increasing pessimism towards OPEC+'s production discipline.
Tim Waterer, Chief Market Analyst at KCM Trade in Australia, stated: "Overall, oil prices have been striving for recovery this week."
Waterer added: "I wouldn't be surprised if oil prices continue to rise from here while demand prospects remain optimistic. This may largely depend on changes in demand during the Northern Hemisphere summer."
Russia's commitment to fulfilling the production obligations stipulated in the OPEC+ agreement has further supported oil prices. Previously, Russia stated that production in May exceeded the quota.
However, with the Federal Reserve maintaining interest rates and postponing the first rate cut until after December, the upward momentum in oil prices has cooled off this week.
Meanwhile, the International Energy Agency (IEA) stated in a report on Wednesday that it expects oil demand to peak in 2029 and stabilize around 106 million barrels per day until 2030.
The market is also monitoring the ongoing ceasefire negotiations in Gaza. If a ceasefire agreement is reached, it will alleviate concerns about potential disruptions in oil supply in the region.
According to reports, a senior U.S. official expressed deep concerns that hostile actions on the Israel-Lebanon border could escalate into a full-scale war. He stated that the region needs specific security arrangements, and a ceasefire in Gaza is not sufficient