Oil prices clawed back the previous day’s losses on Friday, with Brent climbing above $60 a barrel, as tighter supplies from key producers offset slowing demand growth while investors await clues from the Federal Reserve on U.S. monetary policy.
Brent crude rose 10 cents to $60.02 a barrel, while U.S. crude futures were at $55.38 a barrel, up 3 cents. Both contracts were on track for a second weekly gain.
“Oil is set to trade quietly today as it’s all about the Jackson Hole (meeting) tonight,” Jeffrey Halley, a Singapore-based senior market analyst at brokerage Oanda.
“What we’re seeing is some profit-taking in Asia in very light volumes.”
A speech by Federal Reserve Chair Jerome Powell later on Friday at meeting of central bankers in Jackson Hole is expected to provide some clues on whether the Fed will cut interest rates for a second time this year to boost the U.S. economy.
Traders’ expectations of further U.S. monetary easing were clouded by comments from two Fed officials who said on Wednesday that they do not see a case for a rate cut now.
A reduction in interest rates could strengthen the U.S. dollar against other currencies and make dollar-denominated oil more costly for investors.
Oil prices are down for nearly two straight months after the International Energy Agency and the Organization of Petroleum Exporting Countries, OPEC cut demand growth forecasts as a simmering U.S.-China trade war hit global economic growth.
However, oil prices remained supported by production cuts from OPEC members and Russia while U.S. sanctions have sharply reduced exports from Iran and Venezuela.