Oil prices remained stable on Friday as investors took note of the US Federal Reserve’s latest comments on interest rates amid a sticky inflation environment, while signs of strengthening seasonal fuel demand in the US provided support.
Brent crude futures were up 5 cents at $81.41 a barrel as of 06:40 GMT, while West Texas Intermediate (WTI) crude futures were up 2 cents at $76.89.
Both indicators fell to multi-month lows on Thursday; Brent crude futures closed at their weakest level since January and WTI crude oil futures hit a three-month low.
Brent futures are headed for a weekly decline of more than 3%, while WTI futures are poised for a nearly 4% drop from last week, as ongoing macroeconomic restrictions in the US keep prices stable.
The backdrop of potentially prolonged high interest rates has put significant pressure on oil prices this week.
Minutes of the Fed’s last policy meeting released Wednesday showed policymakers questioning whether current interest rates are high enough to rein in stubborn inflation.
Some officials have said they would be willing to raise borrowing costs again if inflation rises. But Fed Chairman Jerome Powell and other policymakers have said they think further rate hikes are unlikely.
Higher rates could slow economic growth and curtail fuel demand.
Meanwhile, strengthening gasoline demand in the U.S. has helped stabilize prices ahead of the Memorial Day holiday weekend, which marks the start of the U.S. summer driving season.
Gasoline demand in the United States has reached its highest level since November, the Energy Information Administration (EIA) said Wednesday. This will help support the market as U.S. drivers account for about a tenth of global oil demand, contributing to a recovery in demand growth.
All eyes are now on OPEC+’s meeting on June 1 to discuss whether their voluntary oil production cuts of 2.2 million barrels per day will be extended.
The market is also cautious about taking an aggressive position ahead of next week’s OPEC meeting where supply policy will be discussed.
