Oil prices rose today, Friday, on track to achieve their first weekly gain in two months, benefiting from optimistic forecasts from the International Energy Agency regarding oil demand next year and a weaker dollar. By 03:35 GMT, Brent crude futures increased by 40 cents to $77.01 per barrel. West Texas Intermediate crude also rose by 40 cents to $71.98. Both benchmark crude oils are set for modest weekly gains following an announcement from the United States earlier this week.
The Federal Reserve is likely to reduce borrowing costs next year. The dollar fell to its lowest level in four months on Thursday. The central bank indicated that interest rate hikes are likely to end, and borrowing costs will decrease in 2024. A weaker dollar makes dollar-denominated oil cheaper for foreign buyers.
The 2024 demand estimates are less than half of the Organization of the Petroleum Exporting Countries (OPEC) forecast for growth, which is 2.25 million barrels per day. Weak economic data from China, the world's second-largest oil consumer, has increased pressure on oil prices in recent weeks.
Data released by the National Bureau of Statistics of China on Friday showed that crude processing in November fell to its lowest level since the beginning of 2023, as margin pressures on independent refineries led to reduced output, while slowing diesel consumption impacted domestic fuel demand.
Despite ongoing concerns in China's real estate market, the data also showed better-than-expected performance in industrial production and improved retail sales, providing some relief to market sentiment amid the country's sluggish economic recovery post-COVID-19.
