Oil edges higher after inflation gloom hit prices
Oil prices crept higher on Friday, having been under pressure from lingering concerns that sticky inflation could prolong higher interest rates and curb fuel demand.
crept higher on Friday, having been under pressure from lingering concerns that sticky could prolong higher and curb .The July contract was up 41 cents to $81.77 a barrel by 1351 GMT. The more-active August contract was also up 41 cents at $81.52.
U.S. West Texas Intermediate (WTI) crude futures rose 57 cents at $77.44.
On Thursday, Brent closed at its weakest since Feb. 7 and U.S. WTI futures at their lowest since Feb. 23.
The contracts were heading for weekly declines, with Brent set for a fifth consecutive daily decline for its longest losing streak of the year.
"The backdrop of potentially higher-for-longer rates weighed significantly on oil prices this week," said Phillip Nova analyst Priyanka Sachdeva.
Minutes released on Wednesday from the 's latest policy meeting showed policymakers were questioning whether interest rates are high enough to tame stubborn inflation.
Some officials said they would be willing to raise borrowing costs again if surged. Fed Chair Jerome Powell and other policymakers, however, have since said they feel further increases are unlikely.
The rate cut cycles in different Western economies should differ given recent inflation data, analysts highlighted.
The is not expected to implement a cut anytime soon, they said, "while the start of the easing cycle for the ECB () and BoC () looks around the corner, and the BoE (Bank of England) is in a very unpalatable place."
Higher interest rates increase the cost of borrowing, which can slow economic activity and dampen demand for oil.
"Macroeconomic developments have been failing to provide meaningful support for oil," PVM analyst Tamas Varga said. "It is a fair bet that are slipping away."
Attention is also on a June 2 online meeting of the OPEC+ producer group comprising the and its allies to discuss whether to extend voluntary oil output cuts of 2.2 million barrels per day.
"After the OPEC+ meeting the market is likely to increasingly focus on demand again. The upcoming Memorial Day weekend marks the start of the summer driving season in the U.S.," said Commerzbank analyst Barbara Lambrecht.
U.S. gasoline supplied, a proxy for demand, reached its highest level since November in the week to May 17, the Energy Information Administration (EIA) said on Wednesday.
