Oil prices surge 4pc WoW on improved demand outlook

ISLAMABAD
Oil futures posted a weekly gain of around 4 percent amid a surprise drop in US crude stocks and an improving global oil demand outlook.
Major global benchmark Brent ended the week higher by 3.97 percent. Brent, the international benchmark for two-thirds of the world’s oil, increased to $85.34 a barrel from $82.08 a barrel during the week under review, showing an increase of $3.26 on a week-on-week (WoW) basis.
Other global benchmark West Texas Intermediate (WTI), the main oil benchmark for North America, also closed the week higher to $81.04 from $78.01 a barrel, registering a weekly increase of $3.03 (+3.88 percent).
Both global benchmarks ended the preceding week lower, as Brent fell to $82.08 a barrel from $83.57 a barrel, showing a decrease of $1.49 (-1.78 percent) on a week-on-week (WoW) basis.
WTI also closed last week lower to $78.01 from $79.97 a barrel, registering a weekly decrease of $1.96 (-2.45 percent).
The International Energy Agency on Thursday raised its oil demand growth forecast for this year by 110,000 barrels per day, and said it expected oil markets to be in a deficit in 2024 instead of the surplus predicted by the agency earlier. The IEA said its forecast was based on the assumption that Opec+ supply cuts would continue into the second half of the year.
Opec+ members, including Saudi Arabia, the UAE and Kuwait, have extended voluntary supply cuts of 2.2 million bpd into the second quarter to stabilise the market. The producer alliance will next meet in Vienna on June 1. This week, Opec stuck to its oil demand projections for 2024 and 2025, and raised its forecast for economic growth this year, citing strong activity in the US and India.
Meanwhile, US crude stocks, an indicator of fuel demand, decreased by 1.5 million barrels in the week that ended on March 8, according to the US Energy Information Administration. Total petroleum stocks fell by 5.7 million barrels, while distillate fuel inventories rose by 900,000 barrels, EIA data showed.
Oil prices also gained as Ukraine’s attacks on Russian refineries stoked fears of a supply disruption. On Wednesday, Ukraine’s drone strikes resulted in a fire at Rosneft’s largest refinery. The incident stood out as one of the most severe attacks on Russia’s energy sector in recent months.