Oil prices record gains for the fourth consecutive week, and Brent exceeds $86 a barrel
Oil prices rose, on Friday, and achieved gains for the fourth week in a row, after the International Energy Agency said that global demand will rise to a new record level this year, supported by the recovery of consumption in China.
The agency also warned that the large production cuts announced by the producing countries in the OPEC + alliance, which consists of the Organization of the Petroleum Exporting Countries (OPEC) and other producers led by Russia, may increase the oil supply shortage and harm consumers.
Brent crude futures rose 22 cents, or 0.3%, to settle at $86.31 a barrel. US West Texas Intermediate crude futures were at $82.52 a barrel, up 36 cents, or 0.4%, according to Reuters.
The two benchmarks recorded gains for the fourth week in a row, in light of calming fears of the banking crisis that occurred last month and the sudden decision to increase production cuts taken last week by the OPEC + alliance.
The International Energy Agency said in its monthly report, yesterday, Friday, that global oil demand is set to rise by two million barrels per day in 2023 to a record level of 101.9 million barrels per day, driven mostly by strong Chinese consumption after lifting restrictions related to the “Covid” pandemic. .
The agency added that the demand for aviation fuel represents 57% of the increase in demand in 2023.
However, last Thursday, OPEC indicated the risks of a decline in oil demand in the summer due to reasons including a cut in production by 1.16 million barrels per day.
"Consumers facing inflation in the prices of basic materials will now have to further stretch their budgets," the agency said in the report.
"This has a strong impact on economic recovery and growth," the agency added.
The agency stated that it expects a decrease in global oil supply by 400,000 barrels per day by the end of the year, indicating an expected increase in production of one million barrels per day from outside “OPEC +” starting in March, compared to 1.4 million barrels per day that will be reduced by the producing countries in the group.
The dollar index is currently at its lowest level in almost a year, after the release of consumer and producer price data in the United States this week, which reinforced expectations that the Federal Reserve (the US central bank) is nearing the end of its interest-raising cycle.
But the US currency rose yesterday, Friday, which makes oil denominated in the US currency more expensive for investors than holders of other currencies, and thus affects demand.