Brent crude futures for July advanced 31 cents, or 0.4%, to $83.98 a barrel, and U.S. West Texas Intermediate crude for June was up 26 cents, or 0.3%, to $79.21 per barrel
Oil prices inched up on Friday, but headed for their sharpest weekly loss in three months as uncertainty about demand and high interest rates drove a sell-off limited by the prospect OPEC+ will continue to curb output.
Brent crude futures for July advanced 31 cents, or 0.4%, to $83.98 a barrel by 0755 GMT. U.S. West Texas Intermediate (WTI) crude for June was up 26 cents, or 0.3%, to $79.21 per barrel.
Both benchmarks are set for weekly losses as investors are concerned higher-for-longer interest rates will curb economic growth in the U.S., the world’s top oil consumer, as well as in other parts of the world.
Brent was on course for a 6.2% weekly drop, and West Texas Intermediate for a loss of 5.6% on the week.
We view the commodities sell-off over the past two days as collateral damage from the Fed repricing and non-fundamental in nature, JP Morgan analysts stated in a note.
For further guidance, the market awaits U.S. economic data and indicators of future crude supply from the world’s leading producer.
The U.S. Fed held interest rates steady this week, and flagged high inflation data that could delay rate cuts.
Later on Friday, the U.S. Bureau of Labor Statistics (BLS) will release its monthly nonfarm payroll report, a measure of the strength of the country’s job market the Fed takes into consideration when setting interest rates.
Higher rates typically weigh on the economy and can lower oil demand.
Also on Friday, energy services firm Baker Hughes is due to release its weekly count of oil and gas rigs, an indicator of future crude output.
Geopolitical risk premiums due to the Middle East war, which has the potential to lead to oil supply disruption, have also faded as Israel and Hamas consider a temporary ceasefire and hold talks with international mediators.
Further ahead, the next meeting of OPEC+ oil producers – members of the OPEC and allies including Russia – is set for June 1.
Three sources from the OPEC+ group said it could extend its voluntary oil output cuts of 2.2 million bpd beyond June if oil demand does not increase.
