By Adedapo Adesanya
Oil prices slightly went down on Friday after a survey showed weakening US consumer sentiment as investors weighed forecasts for solid crude oil and fuel demand in 2024.
Brent crude futures declined by 13 cents close at $82.62 a barrel, and the US West Texas Intermediate (WTI) crude futures were down by 17 cents to settle at $78.54 per barrel.
A survey showed US consumer sentiment weakened in June to a seven-month low as the University of Michigan’s preliminary reading on the overall index of consumer sentiment came in at 65.6 this month, compared to a final reading of 69.1 in May.
Brent and the US benchmark gained nearly 4 per cent over the week, the highest weekly rise in percentage terms since April.
The US Energy Information Administration (EIA) slightly increased its estimate of oil demand growth for 2024, which in turn limited losses. Meanwhile, the Organisation of the Petroleum Exporting Countries (OPEC) maintained its forecast of relatively strong growth at 2.2 million barrels per day.
In the interim, the International Energy Agency (IEA) reduced its demand growth forecast to less than 1 million barrels per day.
Nevertheless, each of the three forecasters anticipated a supply deficit until the commencement of winter.
Also, this week, the US Federal Reserve kept interest rates on hold, and investors believe rate cuts are unlikely before December.
The US Federal Reserve raised rates aggressively in 2022 and 2023 to curb inflation that had surged to a 40-year high in the aftermath of the COVID-19 pandemic.
Under the current projections, absent a surprise in upcoming inflation or jobs data, the cuts would likely not begin until December, moving the US central bank decision out of the November 5 US presidential election cycle.
Elsewhere, Russia pledged to meet its output obligations under the OPEC+ pact after saying it exceeded its quota in May.
Prices dipped last week after OPEC and its allies said they would phase out output cuts starting from October.
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, energy services firm Baker Hughes.