Key points:

  • Oil fell on Friday, driven by continued high interest rates in the US.
  • Weekly growth of an asset by more than 3% – a maximum of two months.
  • OPEC+ expects no increase in demand to 116 million barrels per day by 2045 and no peak.

Oil prices fell on Friday, reflecting the impact of a longer-than-expected continuation of high interest rates in the United States. However, oil indices remain on an upward trend, approaching their highs in the last two months, amid optimistic forecasts for demand for oil and fuel.

Despite the latest decline, the price of oil rose this week

Oil prices showed a decline in trading on Friday. Brent crude futures fell 0.5% to $82.33 a barrel, while U.S. WTI crude futures lost 0.7% to $78.11 a barrel.

Despite Friday’s decline, both brands of oil showed growth of more than 3% over the week. This was the best result since April 5.

However, price gains slowed this week after the US Federal Reserve left interest rates unchanged. Their reduction is expected to be delayed until December.

Meanwhile, the International Energy Agency (IEA) forecast oil demand to peak by 2029 in a report released on Wednesday. It is expected to stabilize at around 106 million barrels per day by the end of the decade.

The market is also focused on ceasefire negotiations in Gaza. The successful conclusion of these negotiations could reduce concerns about potential disruptions in oil supplies from the region.

OPEC+ is set for continued oil demand

In its long-term forecast, OPEC+ doesn’t foresee a peak in oil demand. According to their expectations, by 2045 it will grow to 116 million barrels per day, and possibly higher.

In order to support the market, OPEC+ (which includes OPEC (de facto led by Saudi Arabia) and non-OPEC oil exporting countries) is implementing a series of significant production cuts from the end of 2022.

The total OPEC+ cuts amount to 5.86 million barrels per day, equivalent to about 5.7% of global demand.

This includes a 3.66 million bpd production cut that was agreed on June 2 and will last until the end of 2025, as well as a 2.2 million bpd cut that will be phased out by OPEC+ over the course of the year, starting from October.