Oil Prices Settle Lower but Break Three-Week Losing Streak Amid Demand Hopes

Oil prices closed lower on Friday, but managed to break a three-week losing streak, supported by optimism that seasonal fuel demand during the summer is expected to rise and reduce crude inventories in the coming weeks.

As of 14:30 ET, oil prices decreased slightly, with one type falling 0.2% to settle at $78.45 a barrel, and another down 0.1% at $82.66 a barrel.

### Oil Ends Three-Week Decline Following OPEC+ Reassurances

Much of the crude oil price increase this week resulted from a recovery from four-month lows, after the Organization of the Petroleum Exporting Countries and its allies (OPEC+) reaffirmed their commitment to maintaining lower production levels to stabilize prices.

During its June meeting, OPEC+ indicated that it might consider reducing its voluntary production cuts of 2.2 million barrels per day later this year—a signal that was met with skepticism by the crude markets.

This assurance from OPEC coincided with traders analyzing predominantly positive forecasts for global oil demand. The U.S. Energy Information Administration raised its world oil demand forecast to 104.5 million barrels per day for next year, up from a previous estimate of 104.3 million. Meanwhile, OPEC maintained its outlook for robust global oil demand in 2024. In contrast, the International Energy Agency downgraded its 2024 global crude demand forecast by 100,000 barrels per day to 960,000.

Additionally, softer U.S. inflation data released this week, which raised hopes for potential interest rate cuts, also boosted oil market sentiment, with many now anticipating two rate cuts within the year.

### Putin Outlines Conditions for Peace

On Friday, President Vladimir Putin expressed that Russia would agree to a ceasefire and enter peace negotiations if Ukraine were to renounce its NATO aspirations and withdraw its forces from four regions in Ukraine claimed by Moscow.

These demands are significantly different from Ukraine’s position, with Kyiv insisting that peace is contingent upon a complete withdrawal of Russian forces and the restoration of its territorial sovereignty.

The upcoming weekend summit in Switzerland, which will involve representatives from over 90 nations and organizations, is expected to focus on issues such as food security and nuclear safety in Ukraine, while avoiding contentious territorial discussions.