Oil heads for weekly gains, uncertainty on demand curbs advance

Oil prices rose slightly on Friday, with crude contracts heading towards recording weekly gains, while recession fears receding, but uncertainty about demand expectations limited the gains.

By 0736 GMT, Brent crude futures rose 23 cents, or 0.2%, to trade at $99.83 a barrel. West Texas Intermediate crude futures were down three cents at $94.37 a barrel.

Brent crude is heading towards rising by more than 3% during the week, compensating some of last week’s losses, when it plunged 14% in the largest weekly loss since April 2020, amid fears that an increase in inflation and raising interest rates will harm economic growth and demand on fuel, Reuters reported.

On Thursday, OPEC cut its forecast for global oil demand growth in 2022 by 260,000 barrels per day. It now expects demand to increase by 3.1 million barrels per day this year.

This contrasts with the vision of the International Energy Agency, which raised its forecast for demand growth to 2.1 million barrels per day due to the shift to oil instead of gas to generate electricity as a result of high international gas prices.

At the same time, the International Energy Agency raised its forecast for Russian oil supply by 500,000 barrels per day in the second half of 2022, but said that OPEC would struggle to boost production.