Oil prices rose slightly on Friday on expectations that OPEC+ will continue production cuts, but crude oil benchmarks headed for their steepest weekly losses in three months as demand uncertainty and tensions eased in the Middle East, reducing supply risks.
July Brent crude futures were up 14 cents at $83.82 a barrel as of 06:46 GMT. WTI crude oil rose 16 cents, or 0.2%, to $79.11 a barrel in June.
But both indicators are on track for weekly losses amid concerns that higher interest rates could curb growth in the United States, the biggest consumer of oil, and other parts of the world.
As driving season approaches in the United States, high inflation may cause consumers to be economical and opt for short drives during the holiday season.
The market is currently looking at US economic data and indicators of future crude oil supplies from the world’s largest producer.
The US Federal Reserve kept interest rates steady this week, signaling that recent disappointingly high inflation readings could cause rate cuts to take some time.
Israel and Hamas are considering a temporary ceasefire and are in talks with international mediators. Geopolitical risk premiums caused by the Israel-Hamas war, which keeps prices high due to global supply risks, are also weakening.
Brent is heading for a weekly decline of 6.3%, while WTI is heading for a weekly decline of 5.6%.
The drop comes just weeks before the next meeting of the Organization of the Petroleum Exporting Countries and Russia-led allies, called OPEC+.
OPEC+ producer sources said that the voluntary oil production cuts of 2.2 million barrels could be extended until after June, but the group has not yet started official negotiations before the June 1 meeting.
Later Friday, the U.S. Bureau of Labor Statistics will release its monthly nonfarm payrolls report, a measure of the strength of the nation’s labor market and taken into account by the Fed when setting interest rates. Higher rates often burden the economy, which can reduce oil demand.
