International crude oil prices settled slightly lower in the previous session after a survey showed deteriorating US consumer sentiment. Still, prices rose four per cent for the week as investors weighed forecasts for solid demand for crude oil and fuel in 2024. Oil benchmarks slipped after a survey showed US consumer sentiment weakened in June to a seven-month low.
Brent crude futures last settled down 13 cents at $82.62 per barrel, while West Texas Intermediate (WTI) US crude futures were down 17 cents at $78.54. Brent and the US benchmark gained four per cent on the week, the highest weekly rise in percentage terms since April. Coming to domestic prices, crude oil futures settled 0.05 per cent lower at ₹6,571 per barrel on the multi-commodity exchange (MCX).
What’s driving crude oil prices?
-Even after the US central bank delayed the prospects of rate cuts, losses were limited by forecasts for strong demand in 2024. The US 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. The US Federal Reserve kept interest rates on hold, and investors believe rate cuts are unlikely before December.
-The US active oil rig count, an early indicator of future output, fell by four to 488 this week to its lowest since January 2022, said energy services firm Baker Hughes. Elsewhere, Russia pledged to meet its output obligations under the OPEC pact after saying it exceeded its quota in May.
-Oil prices dipped last week after OPEC and its allies said they would phase out output cuts starting from October. The focus is also on Gaza ceasefire talks, which could alleviate concerns about potential disruption to oil supply from the region.
