Oil Prices Inch Higher

Oil Prices Inch Higher
Oil Prices Inch Higher

Oil prices increased on Friday, with benchmark contracts headed for a weekly climb as recession fears ease, though an uncertain demand outlook capped gains.
Brent crude futures rose 23 cents, or 0.2%, to $99.83 a barrel, while US West Texas Intermediate crude futures climbed 3 cents to $94.37 a barrel, Reuters reported.
Brent was on track to climb more than 3% for the week, recouping part of last week's 14% tumble, its biggest weekly decline since April 2020 amid fears that rising inflation and interest rate hikes will hit economic growth and fuel demand.
Uncertainty capped price gains as the market absorbed contrasting demand views from the Organization of Petroleum Exporting Countries and the International Energy Agency.
On Thursday, OPEC cut its forecast for growth in world oil demand in 2022 by 260,000 barrels per day. It now expects demand to rise by 3.1 million bpd this year.
It contradicts the view from IEA, which raised its forecast for demand growth to 2.1 million bpd, due to gas-to-oil switching in power generation as a result of soaring gas prices.
"There's a great deal of uncertainty about demand in the short run. Until that settles, it [the market] will be like this for a while," said Justin Smirk, a senior economist at Westpac.
At the same time, IEA raised its outlook for Russian oil supply by 500,000 bpd for the second half of 2022, but said OPEC would struggle to boost production.

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