Oil futures: Crude benchmarks steady, head for solid weekly gains

Quantum Commodity Intelligence – Crude oil futures Friday were little changed as benchmarks headed for solid weekly gains, having recovered early-month losses that came in the wake of the OPEC+ meeting.

Front-month Aug24 ICE Brent futures were trading at $82.73/b (1800 GMT), compared to Thursday's settle of $82.75/b and on course for gains of around $3/b this week.

At the same time Jul24 NYMEX WTI was trading at $78.64/b versus Thursday's settle of $78.62/b, also on course for a gain of 4% since last Friday.

Markets have now regained all of the losses that followed the OPEC+ meeting on 2 June, where the group announced it would start unwinding cuts in October.

On review, analysts see last week's selloff as overdone, with the extension of all three phases of OPEC+ cuts pushed back until at least the end of Q3, keeping the supply versus demand picture in deficit for this year.

Goldman Sachs said in its latest report that it expects a supply deficit of up to 1.3 million bpd by the third quarter of 2024 as travel and cooling demand ramps up through the summer, as it maintained its $75-$90/b Brent crude forecast Monday.

Providing further support for the market, Russia, Iraq, and Kazakhstan have pledged to meet output obligations, including compensation cuts for previous overproduction.

Prices were also give a lift at the start of the week after the US Department of Energy tendered for another 6 million barrels for SPR restocking.

On the downside, sluggish refining margins continue to weigh on sentiment, while stubbornly high inflation has again put US rate cuts on hold.

Last Friday, Aug24 Brent futures closed at $79.61/b, while Jul24 WTI settled at $75.53/b, as both benchmarks rebounded from the previous week's four-month lows.