Oil rises for the second session before US inflation data

 Oil rises for the second session before US inflation data

Oil prices rose for a second session, trimming a modest weekly loss, ahead of US data that will help determine the course of the monetary policy debate.

WTI rose near $76 a barrel, after closing nearly 2% higher in the previous session.

Investors will be watching personal spending data later on Friday for clues to the future path of interest rates. This week's Federal Reserve minutes indicated the desire for more interest rate hikes.

The direction of oil prices this year has been skewed between rising optimism about China's recovery after the end of "zero-Covid" measures and persistent concerns about an economic slowdown in the United States.

Wall Street banks have started lowering their forecasts for crude oil prices, most recently those from UBS Group and Morgan Stanley.

“A more convincing recovery in Chinese activity is needed to lift oil prices,” said Charu Ghanana, strategist at Saxo Capital Markets. He added that the possibility of an increase in interest rates and an increase in US inventories affected prices.

US crude stocks rose 7.65 million barrels last week to the highest level since May 2021, according to government data. Inventories at the main storage hub in Cushing, Oklahoma, the delivery point for WTI, increased for the eighth week to their highest level since June 2021.

Since late December, the spread between WTI contracts has stabilized at a "contango" condition, which indicates falling prices, indicating ample supply. In the Brent crude market, the price differential between the two nearest contracts indicates a tighter market as supply remains limited in the face of growing demand.

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