Oil prices pulled back Friday as the market sorted through conflicting demand forecasts from OPEC and the International Energy Agency.
The West Texas Intermediate contract for March lost 63 cents, or 0.81%, to $77.40 a barrel. April Brent futures dropped 75 cents a barrel to $82.09 a barrel, down 0.91%.
The pullback comes after U.S. crude and the global benchmark rallied Thursday, brushing off a weak global demand forecast for 2024 from the IEA.
Crude prices found support Thursday after U.S. consumer retail sales fell more than than expected in January, putting pressure on the dollar by suggesting a slower economy and raising hopes that the Federal Reserve might soon start cutting interest rates.
The IEA forecast Thursday that worldwide crude oil demand growth would slow by half this year’s pace, to 1.2 million barrels per day this year, compared to 2.3 million bpd in 2023. Supply is expected to exceed demand, with production outside OPEC rising by 1.7 million bpd, according to IEA.
But OPEC on Tuesday predicted a much tighter market this year, with demand growing by 2.2 million bpd, outpacing production growth outside the cartel of what it said would total 1.2 million bpd.
“There is and has been a yawning chasm in demand estimates,” wrote Tamas Varga, analyst at oil broker PVM.
“It is always tricky and challenging to predict the medium- to long-term prospects but the difference of opinions in global oil consumption for this year and the individual quarters, even for the current one, is clearly puzzling,” Varga said.