(Reuters) – Oil prices rose in early Asian trading hours on Friday as signs of strong summer demand and easing inflationary pressures in the world’s biggest oil market, the United States, bolstered investor confidence.
Brent crude futures rose 37 cents, or 0.4%, to $85.77 a barrel by 0031 GMT. U.S. West Texas Intermediate crude futures rose 50 cents, or 0.6%, to $83.12 a barrel.
Both contracts gained in the prior two sessions, but Brent futures were set to decline about 1% week-over-week after four consecutive weeks of gains. WTI futures were virtually unchanged on a weekly basis.
U.S. gasoline demand was at 9.4 million barrels per day (bpd) in the week ended July 5, the highest for the week that includes the Independence Day holiday since 2019, government data showed on Wednesday. Jet fuel demand on a four-week average basis was at its strongest since January 2020, according to the data.
Strong fuel demand encouraged U.S. refiners to ramp up activity and draw from crude oil stockpiles, supporting prices. U.S. Gulf Coast refiners’ net input of crude rose last week to more than 9.4 million bpd for the first time since January 2019, government data showed.
WTI front-month futures recorded their steepest premium to the next-month contract since April, a signal of near-term supply tightness.
U.S. government data on Thursday showed an unexpected decline in consumer prices in June, stoking hopes that the Federal Reserve will cut interest rates soon.
The prospect of easing monetary policy has helped boost sentiment across the commodities sector, ANZ analyst Daniel Hynes wrote in a note. A weaker U.S. dollar has also increased investor appetite, he added.
The U.S. dollar index slipped lower for a third consecutive session on Friday, as market participants raised their bets for a September U.S. interest rate cut.
(Reporting by Shariq Khan in New York; Editing by Jamie Freed)
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