Oil prices dip but still set for positive week on OPEC hopes

Investing.com-- Oil prices fell in Asian trade on Friday as traders locked-in some profits at the end of a positive week, with crude prices set for their first weekly gain in four on hopes of tighter supplies. 

Crude prices came out on top despite mixed signals on U.S. interest rates, after the Federal Reserve said it saw much fewer interest rate cuts in 2024 than initially forecast. But soft inflation readings pushed up hopes that this would not remain the case.

Brent oil futures expiring in August fell 0.6% to $82.22 a barrel, while West Texas Intermediate crude futures fell 0.7% to $77.72 a barrel by 21:18 ET (01:18 GMT). 

Oil heads for positive week after OPEC+ assurances

Brent and WTI contracts were up over 3% for the week.

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. 

The OPEC+ had during its June meeting flagged the possibility of scaling back its 2.2 million barrels per day production cuts later this year- a signal that was received negatively by crude markets. 

But the OPEC+ had 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. 

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.