(Bloomberg) — Oil prices edged higher for the week as appetite for risk assets, including oil and other commodities, builds ahead of U.S. inflation data that could provide further clues about the future direction of monetary policy. .
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Brent was above $89 a barrel, up more than 2% for the week, and West Texas Intermediate was near $84. The Fed's recommended inflation rate is expected to be released later Friday, following data showing slowing U.S. economic growth. Other indicators of U.S. price growth remain stronger than expected, suggesting the timing of a rate cut may be delayed.
Oil prices have advanced this year against a backdrop of political risks in the Middle East, including supply cuts implemented by OPEC+ and rising tensions between Israel and Iran, which sent Brent crude prices above $90 per barrel earlier this month. This week's gains were also supported by lower inventories across the United States.
“The focus will remain macro,” said Charu Chanana, an analyst at Saxo Capital Markets, adding that further acceleration in prices could cloud the demand outlook. He also said there were headwinds from weaker U.S. GDP statistics, raising concerns about stagflation.
Still, time spreads suggest a tight market, with the gap between Brent's last two contracts at $1.30 per barrel in warwardation, with closer contracts trading at a premium over longer-term contracts. This is a bullish pattern. This is more than double the difference seen a month ago.
On Friday, the world's largest oil majors, such as Chevron and ExxonMobil, will be attracting attention as well as their financial results and market commentary.
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