Brent oil futures prices pared gains on Friday, but were still on course for their best week in months as investors weighed an unexpected deterioration of U.S. consumer sentiment against forecasts for solid crude oil and fuel demand in 2024.
Brent crude futures were up 3 cents at $82.78 a barrel at 12:00 pm EDT (1600 GMT). West Texas Intermediate (WTI) U.S. crude futures were down 2 cents at $78.60.
Brent and the U.S. benchmark have gained roughly 4% over the week, which if sustained would mark both benchmarks’ highest weekly rise in percentage terms since April.
U.S. consumer sentiment weakened in June to a seven-month low as inflation and income worries linger, a survey showed on Friday.
“The data came in way lower than expected,” said Bob Yawger, director of energy futures at Mizuho. “That implies the average consumers don’t have confidence the economic situation is improving.”
Earlier this week oil prices ticked up on forecasts for strong demand.
The U.S. Energy Information Administration (EIA) upgraded its oil demand growth estimate for 2024 slightly, and the Organization of the Petroleum Exporting Countries (OPEC) stuck to a forecast for relatively strong growth of 2.2 million barrels a day (bpd).
The International Energy Agency (IEA) meanwhile cut its demand growth forecast to under 1 million bpd.
However, all three forecasters predicted a supply deficit at least until the beginning of winter, Commerzbank analysts highlighted.
The 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 OPEC+ pact after saying it exceeded its quota in May.
Prices dipped last week after OPEC and its allies said they would phase out output cuts starting from October.
“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.
Source: Reuters (Reporting by Nicole Jao in New York, Robert Harvey and Natalie Grover in London and Ashitha Shivaprasad in Singapore; Addititonal reporting by Katya Golubkova in Tokyo; Editing by David Goodman, Mark Potter and Jan Harvey)