Oil prices set for weekly climb, uncertain demand outlook cap gains


By Noah Browning


LONDON (Reuters) -Oil prices were down slightly on Friday but set to rise on the week as fears eased though an uncertain demand outlook capped gains.


futures were down 9 cents, or 0.1%, to $99.51 a barrel 0900 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell 38 cents or 0.4% to $93.96 a barrel.


Brent was on track to rise more than 3% this week after last week’s 14% tumble, its biggest weekly decline since April 2020 amid fears that rising inflation and interest rate hikes will hit economic growth and demand for fuel.


Uncertainty capped price gains as the market absorbed contrasting demand views from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA).


“While the peaking-inflation narrative has given some traction for risk assets lately, the more measured moves in oil prices since June suggest that some reservations remain in light of its cloudy demand outlook,” said Yeap Jun Rong, a market strategist at IG.


The trade-off for growth may continue to limit oil prices’ upside, with key psychological resistance for Brent at the $100 a barrel level, Yeap added.


On Thursday, cut its forecast for growth in world oil demand in 2022 by 260,000 barrels per day (bpd). It now expects demand to rise by 3.1 million bpd this year.


In contrast, the raised its demand growth forecast to 2.1 million bpd citing gas-to-oil switching in power generation.


“There’s a great deal of uncertainty about demand in the short run. Until that settles, it (the market) will be like this for a while,” said Justin Smirk, a senior economist at Westpac.


The also raised its outlook for Russian oil supply by 500,000 bpd for the second half of 2022, but said would struggle to boost production.


“The oil market has bounced back this week, with Brent once more flirting with triple figures,” said Craig Erlam, senior market analyst at Oanda in London.


“All things considered, the price moves highlight just how tight the market remains and how sensitive it therefore still is to spikes.”


(Additional reporting by Sonali Paul in Melbourne and Jeslyn Lerh in Singapore; editing by Kenneth Maxwell and Jason Neely)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor



Source link

Recent Posts

Scan to Download
ios&Android APP

Open trading account and start trading!

Join our happy customers