Oil settles 1% higher on tightening supplies

01 Apr Oil settles 1% higher on tightening supplies

Oil prices rose by more than a dollar a barrel on Friday to record their second-straight week of gains, as supplies tightened in some parts of the world and U.S. inflation data indicated price rises were slowing.

The most actively traded Brent futures, for June delivery, settled up $1.29, or 1.6%, at $79.89 a barrel. Brent futures for May delivery, which expired upon settlement, gained 50 cents, or 0.6%, to settle at $79.77 a barrel.

West Texas Intermediate crude (WTI) for May delivery settled higher by $1.30, or 1.8%, at $75.67 a barrel, gaining about 9% for the week.

Data on Friday showed the U.S. Personal Consumption Expenditure (PCE) index, the Federal Reserve’s preferred inflation gauge, rose 0.3% in February on a monthly basis, compared with a 0.6% rise in January and an expectation of a 0.4% rise in a Reuters poll.

Signs that inflation is slowing tend to support oil prices as this could point to less aggressive interest rate hikes from the Fed, lifting investor demand for risk assets like commodities and equities.

Oil prices were also buoyed after producers shut in or reduced output at several oilfields in the semi-autonomous Kurdistan region of northern Iraq following a halt to the northern export pipeline.

With prices recovering from recent lows, the Organization of the Petroleum Exporting Countries and allies led by Russia are likely to stick to their existing output deal at a meeting on Monday, sources said.

OPEC pumped 28.90 million barrels per day (bpd) this month, a Reuters survey found, down 70,000 bpd from February. Output is down more than 700,000 bpd from September.