Oil prices rose in early Asian trading on Friday, after falling 1 percent in the previous session, as the market assessed supportive supply conditions ahead of the International Energy Agency’s monthly demand forecast.
And by 0035 GMT, Brent crude futures rose 17 cents, or 0.2 percent, to $ 86.26 a barrel. US West Texas Intermediate crude futures rose 20 cents, or 0.2 percent, to $82.36 a barrel.
Prices were supported by expectations of a supply shortage due to expected lower production in Russia.
“Russian exports are showing signs of declining, with production reported to have shrunk by 700,000 barrels per day,” analysts from ANZ Bank said in a note to clients on Friday morning.
On the demand side, investors will focus on the International Energy Agency’s monthly oil market report later today, with the agency likely to cut its global demand forecast due to faltering macroeconomic growth.
The monthly report of the Organization of the Petroleum Exporting Countries (OPEC), which was issued on Thursday, pointed to the risks of falling oil demand in the summer, attributing this to weaker growth, tightening monetary policy and instability in the global financial sector.
However, Chinese trade data released on Thursday showed crude oil imports rising 22.5 percent year-on-year in March, boosting hopes for China’s economic recovery.
The slightly higher levels of prices today, Friday, come at the end of a week in which the two benchmarks reached their highest levels in more than two months, thanks to data showing slowing US inflation and a weak dollar.
WTI has jumped 2% since the start of the week, while Brent crude has risen 1.3%, both recording gains for the fourth straight week.
The dollar index closed yesterday, Thursday, at its lowest level since the beginning of February, after the release of consumer and producer price data in the United States this week, which reinforced expectations that the Federal Reserve (the US central bank) is approaching the end of the rate hike cycle.
A weaker dollar makes dollar-denominated oil cheaper for investors who hold other currencies, boosting demand.