Investing.com– Oil prices edged higher Friday, on course for sharp weekly gains on hopes of supply remaining tight while demand picks up.
At 08:00 ET (12:00 GMT), Brent oil futures rose 0.6% to $83.28 a barrel, while West Texas Intermediate crude futures gained 0.5% to $79.02 a barrel.
Both benchmarks are on course for gains of over 4% for the week, potentially their best week in over two months.
Oil heads for positive week after OPEC+ assurances
A bulk of crude’s gains this week came as prices rebounded from four-month lows, after the Organization of Petroleum Exporting Countries and allies (OPEC+) reiterated its commitment to keeping production low to support prices.
OPEC+ had, during its June meeting, flagged the possibility of scaling back its 2.2 million barrels per day voluntary production cuts later this year- a signal that was received negatively by the crude markets.
But the group then clarified that any increase in production was largely dependent on oil prices, which helped soothe concerns over higher supplies.
The cartel also maintained its annual oil demand growth forecast in a monthly report, citing improved prospects from an eventual lowering in global interest rates.
Putin lays out peace conditions
President Vladimir Putin said on Friday, on the eve of a peace conference in Switzerland to which Russia has not been invited, that his country would cease fire and enter peace talks if Ukraine dropped its NATO ambitions and withdrew its forces from four Ukrainian regions claimed by Moscow.
These conditions are wholly at odds with the terms demanded by Ukraine, with Kyiv stating that peace can only be based on a full withdrawal of Russian forces and the restoration of its territorial integrity.
The weekend summit in Switzerland, which will be attended by representatives of more than 90 nations and organisations, is expected to shy away from territorial issues and focus instead on matters such as food security and nuclear safety in Ukraine.
Demand concerns, oversupply fears still in play
Despite positive signals from the OPEC+, other market indicators still presented some headwinds for oil markets.
U.S. inventories saw an unexpected build last week despite an expected pick-up in demand during the travel-heavy summer season.
The International Energy Agency also lowered its demand growth forecast for the year, and said it expected increased supply in non-OPEC nations, particularly the U.S., to cause a supply glut in the coming years.
Additionally, uncertainty exists over future Fed monetary policy, after the U.S. central bank cut its forecast for rate cuts this year to one, from three previously, while inflation data in the world’s largest energy consumer came in cooler than expected.
(Ambar Warrick contributed to this article.)
