Oil prices rose slightly on Friday amid signs that inflationary pressures are easing in the United States, the world’s largest oil consumer, but Brent crude is set for weekly declines.
Brent crude futures rose 49 cents, or 0.6%, to $85.89 a barrel by 0630 GMT. WTI crude futures gained 58 cents, or 0.7%, to $83.20 a barrel.
Both contracts gained in the previous two sessions, but were still set for weekly declines.
Brent futures are set to fall about 1% weekly after four weeks of gains, while WTI futures were broadly steady weekly.
Investor sentiment strengthened after data on Thursday showed U.S. consumer prices fell in June, raising hopes the Federal Reserve will cut interest rates soon.
Lower interest rates are expected to boost economic growth, which in turn should help boost fuel consumption.
Meanwhile, the market awaits clearer signs of action. Fed Chairman Jerome Powell acknowledged a recent improvement in price pressures but told lawmakers that more data is needed to cut rates.
Cooling U.S. inflation figures could bolster the case for the Fed to ease policy sooner. Still, they also add to a series of downside surprises in U.S. economic data that show the U.S. economy is weakening.
Signs of strong summer fuel demand in the U.S. also supported prices.
U.S. gasoline demand was 9.4 million barrels per day (bpd) in the week ending July 5, the highest since 2019 for the week that included the Independence Day holiday, according to government data on Wednesday. Jet fuel demand was the strongest since January 2020 on a four-week rolling average.
The market may remain spaced out, obstracted by the opposing forces of an expected demand recovery supported by expectations of a strong summer in fuel consumption, but sentiment remains anchored by ongoing economic weakness and uncertain demand recovery.
Strong fuel demand has encouraged U.S. refiners to increase operations and draw crude from stocks. U.S. Gulf Coast refiners’ net crude inputs exceeded 9.4 million bpd last week for the first time since January 2019, according to government data.
