Mumbai, 15 Jun (Commoditiescontrol): Crude oil futures experienced a slight dip on Friday, influenced by a survey revealing a decline in U.S. consumer sentiment. Despite this end-of-week setback, oil prices surged by 4% over the week, marking the most significant weekly gain since April, as investors responded to optimistic forecasts for robust crude oil and fuel demand in 2024.
Brent crude futures settled 13 cents lower at $82.62 per barrel, while West Texas Intermediate (WTI) U.S. crude futures decreased by 17 cents, closing at $78.54 per barrel. Both benchmarks showed nearly a 4% increase over the week, underlining strong market resilience.
The dip on Friday followed a report indicating U.S. consumer sentiment had dropped to a seven-month low in June. However, the losses were moderated by positive demand forecasts. The U.S. Energy Information Administration (EIA) slightly raised its oil demand growth estimate for 2024, while the Organization of the Petroleum Exporting Countries (OPEC) maintained its forecast for a substantial growth of 2.2 million barrels per day (bpd). In contrast, the International Energy Agency (IEA) lowered its demand growth forecast to below 1 million bpd. Nevertheless, all three agencies foresee a supply deficit persisting at least until early winter, according to analysts at Commerzbank.
In other developments, the U.S. Federal Reserve held interest rates steady, and investors predict that rate cuts are improbable before December. The U.S. active oil rig count, an indicator of future output, fell by four to 488 this week, marking its lowest level since January 2022, as reported by Baker Hughes.
Meanwhile, Russia committed to meeting its production obligations under the OPEC+ agreement, despite exceeding its quota in May. Oil prices had dipped last week following OPEC and its allies' announcement to phase out output cuts starting in October.
Market attention is also directed toward the ongoing Gaza ceasefire talks, which could ease concerns about potential disruptions to oil supply from the region. Additionally, the U.S. Commodity Futures Trading Commission (CFTC) noted an increase in money managers' net long positions in U.S. crude futures and options for the week ending June 11.
As the market navigates these mixed signals, the overall sentiment remains cautiously optimistic, with solid demand projections offering support to crude prices.
(By Commoditiescontrol Bureau: 09820130172)
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