Investing.com-- Oil prices rose in Asian trade on Friday amid optimism over U.S. interest rate cuts and improved summer demand, but were still set for weekly losses on some profit-taking.
Speculation over an Israel-Hamas ceasefire also saw traders attach a lower risk premium to oil this week, although it appeared unlikely that an agreement was imminent.
Oil also logged some losses after Hurricane Beryl was seen causing limited disruptions in production along the Gulf of Mexico.
Brent oil futures expiring in September rose 0.1% to $85.52 a barrel, while West Texas Intermediate crude futures rose 0.1% to $81.49 a barrel.
Dollar sinks as weak CPI data drives rate cut hopes
Crude prices benefited from a sharp drop in the dollar after softer-than-expected U.S. inflation data ramped up bets on a September rate cut. The greenback slid to a one-month low against a basket of currencies on Thursday.
Consumer price index data read a touch weaker than expected for June, driving up hopes that the Federal Reserve will have enough impetus to cut rates by 25 basis points in September. This also came as Fed officials offered some positive comments on disinflation and a cooling U.S. economy.
Oil set for mild weekly losses amid profit-taking, ceasefire speculation
Brent and WTI futures were trading down 1.4% and 0.8%, respectively, for the week.
Oil markets saw some profit-taking after a stellar run-up over the past four weeks, which had seen them briefly hit over four-month highs.
Prices had also declined earlier this week after reports highlighted some progress in a ceasefire between Israel and Hamas.
While continued aggression by Israel in the Gaza strip diminished the prospect of a ceasefire, U.S. President Joe Biden said on Thursday that the White House was working to broker an agreement between Israel and Hamas.
Summer demand hopes, tighter supply bets buoy crude
Oil prices largely shrugged off a weak start to the week, as data showed U.S. oil inventories unexpectedly shrank in the past week.
Travel demand in the world’s biggest fuel consumer was also seen reaching record highs last week, thanks to the Independence day holiday.
Global fuel demand is expected to remain robust as travel activity increases during the summer months- a notion reiterated by the Organization of Petroleum Exporting Countries in a monthly report.
Focus is now on key trade data from top oil importer China, after inflation data from the country sparked more concerns over a slowing economic recovery.
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