Oil prices fell on Friday as fears of a recession dampened the outlook for demand, although they were still on track for a weekly rise.
* The futures of the Brent crude were down $1.15, or 1.2%, at $98.45 a barrel at 1110 GMT, while U.S. crude futures were down. West Texas Intermediate (WTI) fell $1.48, or 1.6%, to $92.86 a barrel.
Brent was on track to rise nearly 4% this week following last week’s 14% drop, its biggest weekly decline since April 2020, amid fears that rising inflation and interest rate hikes could hurt economic growth and fuel demand.
Uncertainty limited price gains, as the market absorbed contrasting views on demand from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA)
“We’re seeing an economic slowdown, but it’s unclear if it’s as big as some of the recent outlook has been predicting,” said Ole Hansen, head of commodity strategy at Saxo Bank. “Demand will have ups and downs, but supply remains the main concern.”
On Thursday, OPEC cut its forecast for global oil demand growth in 2022 by 260,000 barrels per day (bpd). It now expects demand to rise by 3.1 million bpd this year.
Instead, the IEA raised its demand growth forecast to 2.1 million bpd citing the shift from gas to oil in power generation.
The IEA also raised its outlook for Russian oil supply by 500,000 bpd by the second half of 2022, but said OPEC would struggle to increase production.