International crude oil prices experienced a minor dip in the previous session after a survey indicated a decline in US consumer sentiment. However, prices rose by 4% over the week, driven by expectations of strong demand for crude oil and fuel in 2024. This marked the highest weekly rise in percentage terms since April.
Brent crude futures last settled down 13 cents at $82.62 per barrel, while West Texas Intermediate (WTI) US crude futures fell 17 cents to $78.54 per barrel. Domestically, crude oil futures on the multi-commodity exchange (MCX) settled 0.05% lower at ₹6,571 per barrel.
Factors Influencing Crude :
- Demand Projections: Despite the US Federal Reserve’s delayed rate cuts, forecasts for strong demand in 2024 helped limit losses. The US Energy Information Administration (EIA) slightly upgraded its oil demand growth estimate for 2024, while the Organization of the Petroleum Exporting Countries (OPEC) maintained a forecast for a strong growth of 2.2 million barrels per day (bpd).
- Supply Concerns: The International Energy Agency (IEA) lowered its demand growth forecast to under 1 million bpd but, along with other forecasters, predicted a supply deficit at least until winter. Additionally, the US active oil rig count fell by four to 488, its lowest since January 2022, according to Baker Hughes.
- Geopolitical Factors: Oil prices dipped earlier after OPEC+ announced plans to phase out output cuts starting October 2024. Ongoing Gaza ceasefire talks could alleviate supply disruption concerns, potentially impacting prices.
Price Outlook
Analysts expect crude oil prices to remain volatile. While strong demand during the US summer driving season supports prices at lower levels, rising US crude oil stocks and a strong dollar could limit gains.
Rahul Kalantri, VP of Commodities at Mehta Equities Ltd, stated, “We expect crude oil prices to remain volatile. Crude oil has support at $77.10–76.50 and resistance at $78.40-78.95. In INR, crude oil has support at ₹6,480-6,410 and resistance at ₹6,610-6,980.”
