# Oil prices slip on cloudy demand outlook, but poised for weekly gain Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-08-12 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Oil Prices Dip Amid Uncertain Demand Outlook Meta Description: Follow the latest developments in the oil market as oil prices fall in Asia trade due to uncertainties in demand outlook. Get insights on benchmark contracts URL: https://financedigest.com/oil-prices-slip-on-cloudy-demand-outlook-but-poised-for-weekly-gainhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-08-12t013103z2lynxmpei7b01artroptp4global-oil-1736815485884-compressed.jpg) By Sonali Paul and Jeslyn Lerh SINGAPORE (Reuters) -Oil prices dropped in Asia trade on Friday amid an uncertain demand outlook, though benchmark contracts were headed for weekly gains as recession fears eased. Brent crude futures fell 49 cents, or 0.5%, to $99.11 a barrel at 0330 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell 50 cents, or 0.5%, to $93.84 a barrel. Brent was on track to climb more than 4% for the week, recouping part of last week’s 14% tumble, its biggest weekly decline since April 2020 amid fears that [rising inflation and interest rate hikes will hit economic growth and fuel demand](https://www.financedigest.com/oil-gains-after-iea-sees-demand-rising-to-record-high.html "Oil gains after IEA sees demand rising to record high"). WTI was heading for a [weekly gain](https://www.financedigest.com/european-shares-set-for-weekly-gain-on-u-s-inflation-outlook.html "European shares set for weekly gain on U.S. inflation outlook") of more than 5%, recouping about half of the previous week’s loss. Uncertainty capped [price gains](https://www.financedigest.com/oil-prices-stable-heading-for-weekly-gain.html "Oil prices stable, heading for weekly gain") as the market absorbed contrasting demand views from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA). While the peaking-inflation narrative has given some traction for risk assets lately, the more measured moves in oil prices since June suggest that some reservations remain in light of its cloudy [demand outlook,”](https://www.financedigest.com/reinsurance-demand-increasing-as-growth-opportunities-emerge-according-to-aon-outlook-report.html "Reinsurance demand increasing as growth opportunities emerge, according to Aon outlook report") said Yeap Jun Rong, a market strategist at IG. The trade-off for growth may continue to limit oil prices’ upside, with key psychological [resistance for Brent at the $100 a barrel level](https://www.financedigest.com/using-agility-to-resist-economic-instability-and-level-the-playing-field.html "Using agility to resist economic instability and level the playing field"), Yeap added. On Thursday, [OPEC cut its forecast for growth in world oil demand](https://www.financedigest.com/oil-prices-rebound-after-opec-upgrades-china-demand-outlook.html "Oil prices rebound after OPEC upgrades China demand outlook") in 2022 by 260,000 barrels per day (bpd). It now expects [demand to rise](https://www.financedigest.com/oil-rises-on-demand-hopes-as-banking-crisis-fears-subside.html "Oil rises on demand hopes as banking crisis fears subside") by 3.1 million bpd this year. That contradicts the view from the IEA, which raised its forecast for demand growth to 2.1 million bpd, due to gas-to-oil switching in power generation as a [result of soaring gas prices](https://www.financedigest.com/immediate-lift-of-oxford-property-prices-to-result-from-new-direct-high-speed-rail-connection-with-london.html "“Immediate lift” of Oxford property prices to result from new direct high speed rail connection with London"). There’s a great deal of uncertainty about demand in the [short run](https://www.financedigest.com/no-poop-for-you-manure-supplies-run-short-as-fertilizer-prices-soar.html "No poop for you: Manure supplies run short as fertilizer prices soar"). Until that settles, it (the market) will be like this for a while,” said Justin Smirk, a senior economist at Westpac. At the same time, the IEA raised its [outlook for Russian oil](https://www.financedigest.com/oil-steadies-after-dipping-on-china-outlook-investors-await-fed-clues.html "Oil steadies after dipping on China outlook; investors await Fed clues") supply by 500,000 bpd for the second half of 2022, but said OPEC would struggle to boost production. The [net picture that the IEA painted was a mix,”](https://www.financedigest.com/how-mixing-farms-with-forests-can-help-the-uk-reach-net-zero.html "How mixing farms with forests can help the UK reach net zero") said Commonwealth Bank analyst Vivek Dhar. [“Russian supply](https://www.financedigest.com/oil-gains-as-russian-supply-cuts-temper-concerns-over-rate-hikes-high-stocks.html "Oil gains as Russian supply cuts temper concerns over rate hikes, high stocks") has been more resilient than thought. Assessing global [oil balances by the end](https://www.financedigest.com/oil-set-to-end-turbulent-2022-modestly-higher.html "Oil set to end turbulent 2022 modestly higher") of the year right now, given what’s happening on the demand side versus what’s happening on supply side – it’s just complicated. That’s why you have the daily volatility.” (Reporting by Sonali Paul in Melbourne and Jeslyn Lerh in Singapore; Editing by Kenneth Maxwell) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---