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Oil prices experienced a decline on Friday following a recent uptick. Geopolitical tensions and disruptions in US oil production due to a cold snap were counteracted by concerns over slowing demand growth in China and expectations of increased supply.
As of 0420 GMT, Brent crude futures dropped by 23 cents, or 0.3 percent, settling at $78.87 per barrel. Simultaneously, US West Texas Intermediate crude futures decreased by seven cents to $74.01.
Both benchmarks had seen a roughly two percent increase on Thursday, buoyed by the International Energy Agency’s optimistic outlook on global oil demand, aligning with expectations from OPEC. The week is set to close with both crude oils showing gains ranging between one and two percent.
The International Energy Agency, on Thursday, once again raised its forecast for global oil demand growth in 2024. While their figures remain slightly below OPEC’s expectations, the agency emphasized the well-supplied market, thanks to robust growth in non-OPEC countries. Global oil supplies are projected to rise by 1.5 million barrels per day to a new level of 103.5 million barrels per day in 2024, propelled by record production from the United States, Brazil, Guyana, and Canada.
In geopolitical developments, Pakistan conducted strikes on separatist militants inside Iran, responding to Tehran’s recent targeting of another group’s bases within Pakistani territory.
Tanker traffic through the Bab al-Mandeb Strait, according to data from consulting company Vortexa, witnessed a 58 percent decrease from January 13 to 17 compared to the same period in 2023.
Meanwhile, the Houthi rebels continued attacks on American ships nearly a week after the United States and Britain launched strikes against the movement’s sites in Yemen.
Beyond the Middle East, the US Energy Information Administration reported a larger-than-expected decline in crude oil inventories of 2.5 million barrels due to strong demand from refineries in the week ending January 12. However, gasoline and distillate stocks rose to multi-year highs.
