Brent crude futures reached $84.83 per barrel, while West Texas Intermediate crude reached $80.7 (Getty)

Although crude oil prices declined slightly in global markets in Friday's trading, they remained on track to achieve weekly gains of more than 3%.

This upward trend was driven by a combination of factors including the International Energy Agency's upward revision of its 2024 oil demand forecasts, unexpected declines in US inventories, and geopolitical tensions affecting global supply chains.

Market performance and trends

Brent crude futures fell 59 cents, or 0.6%, to $84.83 per barrel, while US West Texas Intermediate crude fell 56 cents, or 0.6%, to $80.70.

These slight declines came in the wake of the rise that occurred yesterday, Thursday, which saw the price of Brent crude rise to $85 per barrel for the first time since November.

Vandana Hari, founder of oil market analysis firm Vanda Insights, told Reuters, “Crude oil futures are witnessing a slight decline from the new four-month highs... and are likely to enter the consolidation phase, awaiting further direction.”

Despite this slight decline, oil prices maintained their upward trajectory during the week, supported by positive expectations from the International Energy Agency regarding future oil supply and demand dynamics.

The International Energy Agency's latest report raised its forecast for global oil demand in 2024 for the fourth time since November.

It now expects demand to increase by 1.3 million barrels per day, an increase of 110,000 barrels per day from the previous month.

This upward adjustment stems from rising geopolitical tensions, particularly Houthi attacks that have disrupted shipping in the Red Sea, which have significantly impacted supply chains and contributed to increased supply concerns.

The International Energy Agency raised its forecast for global oil demand in 2024 for the fourth time (French)

Inventory dynamics

US crude oil inventories unexpectedly fell last week.

This decrease is due to refineries intensifying processing operations, in addition to a decrease in gasoline stocks amid high demand.

The Energy Information Administration (EIA) report on Wednesday highlighted these unexpected shifts in inventory, further underscoring the delicate balance between supply and demand in the oil market.

Geopolitical factors

Geopolitical tensions continued to weigh on market sentiment.

The Ukrainian strikes on Russian oil refineries caused a fire in the largest refinery of the Russian company Rosneft, which led to increased concerns about supply disruptions.

Such incidents underscored the vulnerability of the global energy infrastructure in the face of geopolitical turmoil, exacerbating uncertainty within the market.

The United States, Canada, Brazil and Guyana will lead global oil production growth in the near term (Shutterstock)

Expectations and future trends

Looking to the future, market analysts are closely monitoring developments within OPEC+ and non-OPEC countries.

The US Energy Information Administration expects that countries outside OPEC Plus, including the United States, Canada, Brazil and Guyana, will lead global oil production growth in the near term.

This growth is expected to offset voluntary production cuts by the OPEC+ alliance, which could undermine efforts to stabilize markets amid concerns about global demand growth and rising supplies.

Although short-term fluctuations are possible, fundamental factors such as demand expectations, inventory dynamics and geopolitical tensions will continue to shape oil market trends.

Source: Al Jazeera + Reuters