Oil pared earlier gains, pressured by the US dollar after US personal spending data outpaced expectations.
West Texas Intermediate (WTI) for March delivery rose 1.23 percent to US$76.32 a barrel after earlier adding 1.5 percent.
Brent crude for March delivery rose 1.16 percent to US$83.16 a barrel.
Photo: Reuters
The US Federal Reserve’s preferred inflation measure — the personal consumption expenditures price index — came in higher than forecast, in the latest sign of stubbornly persistent price pressures, putting pressure on policymakers to keep ratcheting up interest rates.
US inflation figures were “closely watched on Friday, with the stronger-than-expected result clearly indicating that inflation is heading in the wrong direction,” Saxo Bank head of commodities strategy Ole Hansen said.
Oil prices have been whipsawed this year by bullish optimism around China’s rebound following the end of its COVID-19 restrictions and persistent concerns over a US economic slowdown. Wall Street banks are starting to temper their outlook for crude prices, with UBS Group AG and Morgan Stanley the latest to trim forecasts.
“Despite the fears over higher interest rates crimping oil demand, oil markets are on track to swing into a deficit as Chinese demand recovers and additional Russian output is shut in,” PVM Oil Associates Ltd analyst Stephen Brennock said earlier. “Bullish catalysts may be playing second fiddle to monetary policy concerns, but they will soon draw the attention of traders.”
On a weekly basis, oil prices stagnated as traders confronted bearish trends, including rising US stockpiles and a rebound in demand that has not lived up to expectations.
WTI posted a weekly loss of 0.03 percent, while Brent crude rose 0.19 percent.
US crude inventories have grown by almost 24 million barrels in the past two weeks, adding to an already oversupplied market.
Diesel prices also hit their lowest since before the war in Ukraine as inventories rise and Russia finds ways to export significant amounts of the fuel, BOK Financial Securities senior vice president of trading Dennis Kissler said.
Meanwhile, a proxy for US demand — the four-week average of gasoline product supplied — was at the second-lowest seasonal level since 2014.
Additional reporting by staff writer
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