By Rowena Edwards
LONDON (Reuters) -Oil prices rose as much as $1 on Friday on signs of improving fuel demand, though an upcoming speech from the U.S. Federal Reserve chairman capped further gains.
Brent crude futures climbed $1.53, or 1.54%, to $100.87 a barrel by 1051 GMT. U.S. West Texas Intermediate (WTI) crude futures rose $1.20 cents, or 1.3%, to $93.72.
Both contracts slumped by about $2 on Thursday but are on track for a weekly gain of around 4% for Brent and 3% for WTI.
Better than expected figures concerning the U.S. economy helped to dispel recession fears.
The U.S. economy contracted at a more moderate pace than initially thought in the second quarter as consumer spending blunted some of the drag from a sharp slowdown in inventory accumulation.
Norway’s biggest lender, DNB, said demand concerns look to have been overstated despite a weakening macroeconomic outlook.
“We expect the post-pandemic normalisation of mobility in emerging markets in Asia and gas-to-oil switching effects to partly offset the weaker economic growth. In addition, mobility data appears to be holding up well,” it said.
Additional price support came from OPEC’s de facto leader Saudi Arabia on Monday flagging the possibility of production cuts to balance the oil market and offset the return of Iranian barrels to oil markets should Tehran clinch a nuclear deal with the West.
Other members of the broader OPEC+ producer group have voiced support for the Saudi statement throughout the week. The United Arab Emirates on friday became the latest OPEC+ member to state it is aligned with Saudi Arabia’s thinkng on crude markets, a source with knowledge of the matter told Reuters.
“The impression remains that Saudi Arabia is not willing to tolerate any price slide below $90. Speculators could view this as an invitation to bet on further price rises without the need to fear any more pronounced price declines,” Commerzbank said in a note.
The market awaits fresh signals on the outlook for interest rate increases in a speech from Federal Reserve Chair Jerome Powell later on Friday.
“Fed policymakers have been making hawkish overtures of late, and this stance will likely be reiterated by Powell’s message,” said PVM analyst Stephen Brennock.
(Reporting by Rowena EdwardsAdditional reporting by Sonali Paul in Melbourne and Emily Chow in Kuala LumpurEditing by Jason Neely and David Goodman)
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