Oil prices fell slightly on Friday but rose weekly as tensions in the Middle East and oil production disruptions offset concerns about China and the global economies.
Brent futures fell 54 cents to close at $78.56 a barrel. West Texas Intermediate (WTI) crude fell 67 cents to settle at $73.41.
On a weekly basis, Brent gained about 0.5%, while the WTI rose over 1%.
Slower-than-expected economic growth in China in the fourth quarter has raised doubts about forecasts that Chinese demand will drive global oil growth in 2024.
The Chinese stock market fell to its lowest level in almost five years this week. This, indicative of weak demand, caused crude oil prices to fall on Friday.
Meanwhile, geopolitical risks in the Middle East supported prices throughout the week.
While tensions escalated in Gaza on Friday as Israeli forces advanced southwards against Hamas militants, at the beginning of the week the US launched new attacks against Houthi anti-ship missiles targeting the Red Sea.
Although the conflicts in the Middle East did not stop oil production, supply disruptions continued in Libya.
About 30% of oil production in North Dakota, the nation’s third-largest state, remains shut down due to extreme cold, a pipeline official said Friday. Production have been cut by about 700,000 barrels per day, or more than half, by midweek. The state regulator said Friday it could take a month for production to return to normal levels.
Supply disruptions remain an upside risk, but downside risks remain stiff, including to the global economy.
Meanwhile, the number of oil rigs operating in the US, an indicator of production, fell by two this week to 497.
The International Energy Agency (IEA) this week raised its 2024 global demand forecast, but its forecast remained half that of producer group OPEC. The agency also said that supply looks quite good in 2024 unless there are serious disruptions to flows.
The forecast for global oil demand growth remains uncertain, with stakeholders and research institutions offering widely different forecasts.
The premium of the front-month Brent contract over the six-month contract rose to $2.15 per barrel on Friday, its highest level since November. This structure, called Backwardation, creates the perception that the supply is tighter for fast delivery.
