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Oil Prices Set for Best Week in Over 2 Months on Solid Demand Outlook

Oil prices eased on Friday as markets evaluated the impact of U.S. interest rates staying higher for longer than anticipated, but crude benchmarks headed for their best week in more than two months after solid projections for crude and fuel demand.

Brent crude futures were down 34 cents, or 0.4%, at $82.41 a barrel by 0344 GMT. West Texas Intermediate (WTI) U.S. crude futures lost 41 cents, or 0.5%, to trade at $78.21 a barrel.

However, Brent and the U.S. benchmark gained over 3% for the week – the best week since April 5.

The Organisation of Petroleum Exporting Countries (OPEC) stuck to a forecast for relatively strong growth in global oil demand for 2024 and Goldman Sachs projected solid U.S. fuel demand this summer.

This helped reverse losses in the previous week which were driven by an agreement by OPEC and its allies, together called OPEC+, to start unwinding output cuts after September.

“Overall, this week can be characterised as a recovery effort for oil,” said Tim Waterer, chief market analyst at KCM Trade based in Australia. “I wouldn’t be surprised to see oil prices head higher from here whilst the demand outlook continues to look rosier. Much may depend on how the northern hemisphere summer demand picture plays out.”

Providing further support to the market, Russia pledged to meet its output obligations under the OPEC+ pact, after saying it exceeded its quota in May.

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