By Katya Golubkova
TOKYO (Reuters) – Oil prices fell on Friday but were on track for their first weekly gain in four weeks as markets weighed the impact of higher U.S. interest rates for longer versus a solid outlook for oil. demand for oil and fuel this year.
Brent crude futures were down 72 cents, or 0.87%, at $82.04 a barrel by 0100 GMT. U.S. West Texas Intermediate (WTI) crude futures lost 79 cents, or 1%, to trade at $77.84 per barrel, reversing small gains from the previous session.
In a seesaw week, oil prices rose after the Organization of the Petroleum Exporting Countries (OPEC) maintained a forecast of relatively strong growth in global oil demand for 2024 and Goldman Sachs projected solid fuel demand in the USA this summer.
That helped reverse the previous week’s losses, driven by an agreement between OPEC and its allies, together called OPEC+, to begin reducing their production cuts after September.
Further boosting the market, Russia committed to meeting its production obligations under the OPEC+ pact, after saying it exceeded its quota in May.
“Stricter adherence to current quotas should more than offset any potential increases from the Group of Eight under the phase-out of their voluntary cuts. This should see the crude oil market remain well supported over the next 18 months,” they said ANZ analysts in a client note.
However, prices fell after the US Federal Reserve held interest rates steady and delayed the start of rate cuts until the end of December, with comments from Fed officials fueling concerns of that economic growth could slow down and dampen fuel demand.
The market will be watching a series of inventory reports in China, the world’s second-largest oil consumer, due on Friday, which ANZ analysts say should reveal any weakness in demand for energy and metals.
(Reporting by Katya Golubkova in Tokyo; Editing by Sonali Paul)
