Brent futures rose 96 cents, or 1.2%, to $84.32 a barrel by 12:16 p.m. EDT (1616 GMT). U.S. West Texas Intermediate (WTI) crude rose 78 cents, or 1.0%, to $79.83.
For the week, Brent was down about 1% and WTI down about 2%. Last week, both benchmarks fell about 2%.
Limiting gains, economic news from Germany, Europe’s biggest economy, was weak and the U.S. dollar rose to a five-month high against a basket of other currencies after U.S. Federal Reserve Chair Jerome Powell further interest rate hikes may be needed to fight inflation.
Higher interest rates can slow economic growth and reduce oil demand. A stronger dollar can also slow demand by making oil more expensive for holders of other currencies.
“Supply cuts from OPEC+ continue to support the market but uncertainty over the global economic outlook … are weighing a little,” said Craig Erlam, senior market analyst at OANDA.
Historic or actual 30-day close-to-close volatility in Brent and WTI futures has dropped to the lowest since November 2021. OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allies like Russia, began limiting supplies in late 2022 to bolster the market and in June extended supply curbs into 2024.
Saudi Arabia and Russia said this month they would extend their additional cuts into September.
Several analysts expect Saudi Arabia to extend its oil production cut of 1 million barrels per day (bpd) for a third consecutive month into October.
Rising prices of a Russian crude sold to China should peak soon, with more independent refiners likely to switch to cheaper oil from Iran which ramped up exports to 4-1/2 year highs in August, several trade sources said.
Iran’s oil minister has been quoted saying he expects the country’s crude output to hit 3.4 million bpd by the end of September, even though U.S. sanctions remain in place.
Analysts at Morgan Stanley expect Brent prices to be well supported around $80 per barrel, with crude likely to remain in a deficit over the rest of this year before returning to a small surplus in early 2024.
But the likelihood of crude deficits is no foregone conclusion, said John Evans of oil broker PVM.
Norwegian energy firm Equinor, for example, said it started production at its extended Statfjord Ost field six months ahead of schedule.