In a turn of events, global oil prices experienced a modest uptick on Friday, building on gains from the previous session. The International Energy Agency (IEA) played a pivotal role in boosting market sentiment as it unveiled a robust growth forecast for global oil demand.

The disruptions in U.S. crude output added further buoyancy to the market.

Market Overview

Brent crude is currently trading at $78.6 per barrel, reflecting a marginal increase of 0.06% for the day. Simultaneously, West Texas Intermediate crude (WTI) is trading at $73.9 per barrel, showing a 0.17% uptick compared to the previous close. Both benchmarks are poised to record a weekly gain, fueled by concerns over potential supply disruptions.

Oil traders also grappled with geopolitical risks in the Middle East, contributing to the complex dynamics influencing oil prices. The U.S. Energy Information Administration delivered a report indicating a larger-than-expected draw in crude inventories, totaling 2.5 million barrels in the week ended January 12.

This unexpected draw alleviated fears of a substantial build-up in total inventories, providing modest support to oil prices, according to Giovanni Staunovo, an analyst at UBS.

OPEC maintains optimistic outlook

The IEA's monthly report anticipates a growth in oil demand by 1.24 million barrels per day (bpd) in 2024, marking an increase of 180,000 bpd from its earlier projection.

This follows OPEC's announcement on Wednesday, maintaining its forecast for demand growth at 2.25 million bpd for the current year. The producer group also predicts a robust rise of 1.85 million bpd in 2025, reaching a total of 106.21 million bpd.

US faces production challenges

In the United States, approximately 40% of oil output in North Dakota remained offline due to extreme cold weather and operational challenges, as reported by the state's pipeline authority on Wednesday.

Despite this, the U.S. achieved another record in crude oil production, reaching 13.3 million barrels per day last week, according to EIA data.

Fatih Birol, the executive director of the IEA, expressed confidence in the oil market's stability during a conversation with the Reuters Global Markets Forum. Birol anticipates that oil markets will remain "comfortable and balanced" throughout the year, despite rising supply, slowing demand growth, and tensions in the Middle East.