By Adedapo Adesanya
Oil prices were up on Friday on signals that global demand will hit a record high this year on the back of a recovery in Chinese consumption.
According to data obtained by Business Post, Brent crude futures settled at $86.31 a barrel after rising by 22 cents or 0.3 per cent, as the US West Texas Intermediate crude futures (WTI) settled at $82.52 a barrel after gaining 36 cents or 0.4 per cent.
Both contracts posted a fourth consecutive week of gains amid easing concerns over a banking crisis that struck last month and the surprise decision last week by the Organisation of the Petroleum Exporting Countries and its allies, OPEC+, to further cut output.
In its monthly report on Friday, the International Energy Agency (IEA) said world oil demand is set to grow by 2 million barrels per day in 2023 to a record 101.9 million barrels per day, driven mostly by stronger consumption in China after the lifting of COVID restrictions there.
But OPEC on Thursday flagged downside risks to summer oil demand as part of the backdrop for its decision to cut output by a further 1.16 million barrels per day.
The IEA also warned that deep output cuts by OPEC+ could worsen an oil supply deficit and hurt consumers and global economic recovery.
The IEA said it expected global oil supply to fall by 400,000 barrels per day by the end of the year, citing an expected production increase of 1 million bpd from outside of OPEC+ beginning in March versus a 1.4 million barrels per day decline from the cartel.
The week has seen some positives, as prices were initially fueled by cooling US inflation that raised hopes that the US Federal Reserve will stop raising interest rates.
Signs of demand recovery in China, the top importer of crude oil and products, also provided more support for oil prices. Additionally, although crude inventories rose, traders shrugged off the small build in US crude oil stocks.
Also helping to boost prices was the US oil rig count, an indicator of future supply, which fell for the third week in a row, according to Baker Hughes data. US oil rigs fell by two to 588 this week, their lowest since June 2022.
Pressure came from a stronger Dollar making oil more expensive for investors holding other currencies and limiting oil price growth.
