August 23, 2024 (MLN): Oil edged up on Friday but remained on track for a weekly loss due to a challenging demand outlook and the US efforts to secure a cease-fire in Gaza.
Brent crude traded near $77.35 a barrel. It is down almost 3% this week.
While West Texas Intermediate crude (WTI) was at $73.13 per barrel.
Data this week showed US manufacturing contracting at the fastest pace this year, as well as signs of labor market softness, reported Bloomberg.
In Europe, meanwhile, futures for diesel — a workhorse industrial fuel — have retreated to the lowest level in 14 months.
Oil has shed all of its year-to-date gains as the impact of OPEC+ supply curbs has been overshadowed by a poor economic outlook in major economies, with China showing signs of weakness along with the US.
While the cartel led by Saudi Arabia and Russia has said it aims to ease some output curbs in the fourth quarter, crude’s slide makes that plan more challenging.
“In the short term, Brent prices have declined ahead of fundamentals,” Morgan Stanley analysts including Martijn Rats said in a note, while paring price forecasts for upcoming quarters. “However, with demand set to slow after summer, and both OPEC and non-OPEC supply to increase from the fourth quarter, we foresee a softening balance, turning to surplus in 2025.”
In the Middle East, meanwhile, Israeli negotiators arrived in Cairo for talks aimed at cementing an agreement to pause the war in Gaza between Israel and Hamas, a step that could reduce tensions in the crude-producing region.
Oil market timespreads point to less-tight conditions, with the gap between Brent’s two nearest contracts narrowing. The differential was 68 cents a barrel in backwardation, compared with a high of 92 cents last week.
Later Friday, traders will track a central bankers’ symposium at Jackson Hole, Wyoming, where Federal Reserve Chair Jerome Powell is set to give an address that could offer clues on the path forward for US monetary policy.
His remarks could impact the dollar, as well as wider energy demand.
Copyright Mettis Link News
Posted on: 2024-08-23T12:56:04+05:00
