By Peter Nurse
Investing.com — Oil prices climbed Friday, boosted by bullish comments from the International Energy Agency, but the market is still on course for weekly losses after the strong U.S. inflation data and as Iranian nuclear talks continue.
U.S. Gasoline RBOB Futures were up 0.5% at $2.6787 a gallon.
“The oil market is incredibly tight,” Toril Bosoni, head of the IEA’s markets and industry division, said in a Bloomberg television interview on Friday. “Prices continue to surge and are now reaching levels that are uncomfortable for consumers across the world.”
The agency cited the OPEC+ coalition’s “chronic” struggle to revive output for the market’s tightness, saying that unless the group’s heavyweight producers, i.e. Saudi Arabia and the United Arab Emirates, pump more oil for export, prices will undoubtedly climb further.
The shortfall at the end of the year between the amount of oil the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, was supposed to have pumped and what it actually delivered since the start of 2021 could amount to 1 billion barrels, the IEA estimated.
The Paris-based institute also lifted its 2022 demand forecast by 800,000 barrels a day, seeing global demand growing by 3.2 million barrels a day this year.
This follows OPEC raising its estimate of global demand this year by 4.15 million barrels per day this year in its monthly report on Thursday.
That said, oil prices are on track for their first weekly decline after seven consecutive weekly gains, with traders keeping track of the ongoing talks between the West and Iran over the potential restoration of a treaty limiting the Persian Gulf country’s nuclear ambitions.
A deal could lift U.S. sanctions on Iranian oil, leading to the potential return of more than one million barrels per day, more than 1% of global supply, to the global market.
Also weighing on the crude market was Thursday’s red-hot inflation report, which raised the prospect of aggressive Federal Reserve interest rate hikes, giving the U.S. dollar a lift.
A stronger dollar means that commodities denominated in the greenback, including the crude market, become more expensive for overseas buyers.
Crude Oil Higher; IEA Lifts 2022 Demand Forecast
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