Oil prices saw little movement on Friday, but were on track for a mildly positive week. A softer U.S. dollar, declining U.S. inventories, and increased Chinese stimulus measures have raised hopes of improving demand.
However, crude markets have been grappling with mixed signals this week. A major industry body lowered its demand forecast for the year, tempering optimism. Persistent economic uncertainty surrounding top oil importer China has also sparked some volatility, especially after the U.S. imposed higher trade tariffs on Beijing.
Brent crude futures for July delivery edged up 0.1 percent to $83.33 per barrel, while West Texas Intermediate (WTI) crude steadied around $78.80 per barrel as of 20:55 ET (00:55 GMT).
Read more: Oil prices rise amid weaker dollar, tighter supply expectations
For the week, Brent and WTI futures gained between 0.7 percent and 1.4 percent, with most of the gains coming on Thursday after softer-than-expected U.S. consumer inflation data. The weaker inflation readings battered the U.S. dollar and raised bets that the Federal Reserve could start cutting rates as soon as September, which would be positive for crude demand.
Fed rate cut speculation
However, this optimism was somewhat offset by warnings from several Fed officials that the central bank needs more convincing that inflation is coming down before it can begin trimming rates.
Crude markets were also grappling with mixed cues on demand this week. A larger-than-anticipated draw in U.S. inventories boosted optimism about improving demand as the summer driving season approaches. But this was counterbalanced by the International Energy Agency slightly trimming its annual demand forecast, citing uncertainty over the global economy amid persistent inflation and potentially higher interest rates for longer.
OPEC maintains demand forecast for 2024
On the other hand, OPEC maintained its demand forecast for 2024, citing an eventual economic recovery in China and potentially lower interest rates later in the year. OPEC is also expected to extend its current production cuts beyond the end of June, presenting a tighter supply outlook.
Investors will be closely watching China’s industrial production and retail sales data due later on Friday for more insight into the world’s biggest oil importer’s economic conditions and the potential impact on oil demand.
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