Crude oil futures surged on Friday, buoyed by a promising outlook for global oil demand. The International Energy Agency (IEA) predicted an unprecedented surge in demand, contributing to the momentum that pushed crude oil futures to their seventh consecutive week of gains—the longest streak since 2022.
West Texas Intermediate (WTI) crude futures experienced a notable increase of 37 cents, marking a 0.5% rise to settle at $83.19 per barrel by the end of the trading day. This week saw a cumulative increase of 0.5% for WTI crude prices.
Similarly, Brent crude futures witnessed a rise of 41 cents, also amounting to a 0.5% increase, and settled at $86.81 per barrel. Brent crude posted a weekly gain of 0.7%.Notably, the momentum of Brent crude futures was reminiscent of the January-February period in 2022 when the market experienced seven consecutive weeks of growth. This positive trajectory was, however, disrupted by the Russian invasion of Ukraine.
The International Energy Agency’s (IEA) assessment outlined a record-breaking global oil demand, which reached a remarkable 103 million barrels per day (bpd) in June. The agency projected the potential for yet another surge in demand this month, underlining a continued robust appetite for oil across the globe.
In conjunction with the surging demand projections, supply-side dynamics played a role in boosting market confidence. Production cuts initiated by oil giants Saudi Arabia and Russia are expected to translate into a significant reduction in oil inventories throughout the remainder of the year. The IEA noted that this decline in inventories could exert further upward pressure on oil prices.
The Organization of Petroleum Exporting Countries (OPEC) concurred with the positive sentiment, maintaining their forecast that global oil demand would escalate by 2.44 million barrels per day in the current year. This outlook remained unchanged from their previous assessment, signaling a robust second half of the year for the oil market.US economic data releases during the week added further impetus to the market’s optimism. The data fueled expectations that the Federal Reserve (Fed) might be on the brink of concluding its interest rate hikes, which in turn bolstered market sentiment.
Craig Erlam, an esteemed analyst at Oanda, expressed his perspective on the current market dynamics, emphasizing the influence of production cuts and the improving economic landscape on investor sentiment within the oil market. Nonetheless, Erlam also cautioned that the recent rally in oil prices might lead to a somewhat diminished upward trajectory in the near future.In conclusion, the oil market’s recent rally, fueled by robust demand forecasts and supply-side considerations, reflects a positive sentiment among investors. The intricate interplay between demand projections, production adjustments, and economic indicators underscores the delicate balance that shapes the trajectory of oil prices.
The Spot Market is Closed
Saturday, August 12, 2023
| Energy Updated at | USD Price | Chnage | %Change |
| Crude Oil 09.10 | 83.04 | +0.22% | +0.27% |