By Barani Krishnan
Investing.com - OPEC issued a damning report on oil demand for this year and next, but crude prices rose anyway on Friday to head for a weekly gain after a particularly volatile stretch in recent sessions.
New York-traded West Texas Intermediate crude was up 19 cents, or 0.4%, at $54.66 per barrel by 1:15 PM ET (17:15 GMT).
London-traded Brent crude gained 28 cents,or 0.5%, although the benchmark for oil outside of the U.S. remained below the key $60 per barrel mark at $58.51 per barrel.
For the week, WTI rose 0.4% while Brent was flat after three sessions in the black and two in the red.
Oil markets have been grappling with one of their worst periods of volatility ever as occasionally positive news on crude faces off with trade-war threats, dismal economic data and inversion of the U.S. bond yield curve, which signals recession.
TD Securities noted that “a relief rally” in risk assets was helping alleviate some of the downside pressure in crude following a tumultuous week.
“We continue to see an elevated likelihood that CTAs will turn buyers on WTI crude, which could provide additional support to prices,” the brokerage said, referring to the Commodity Trading Advisors, typically used to refer to hedge funds.
Phil Flynn, senior energy analyst at Price Futures Group in Chicago, said OPEC may express disappointment with oil demand, but there’s still a likelihood for the cartel to “shock and awe” the market with a major production cut.
In its monthly report, OPEC cut its forecast for oil demand growth in 2019 by 40,000 barrels on expected pressure from a global economic slowdown.
The cartel also admitted that 2020 will likely see a supply surplus as rivals continue to increase production, although it also lowered its forecasts for non-OPEC supply.
That, in a way, made the cartel sound more like its often-bearish cousin, the Paris-based International Energy Agency, or IEA, which looks after the interests of global oil consumers.
“While the outlook for market fundamentals seems somewhat bearish for the rest of the year, given softening economic growth, ongoing global trade issues and slowing oil demand growth, it remains critical to closely monitor the supply/demand balance and assist market stability in the months ahead,” OPEC said in the report.