Oil prices posted gains in Asian trade on Friday and extended their gains for a third straight week. It was driven by rising expectations of interest rate cuts and complex refining margin strengthening.
Brent crude futures rose 48 cents (0.56%) to $86.87 a barrel and West Texas Intermediate rose 52 cents (0.64%) to $82.26 a barrel. WTI is up nearly 2% this week.
Growing expectations of the Fed's policy easing cycle have fueled an increase in risk in the stock market. Markets pegged the Fed with a 64% chance of making its first rate cut in September.
The easing of interest rates can provide an advantage for the crude oil market due to high demand from consumers.
A recovery in physical refining margins also buoyed the market with Singapore complex refining margins averaging $1 higher in June than May at around $3.60 per barrel.
For now, the commodity is still limiting gains as it maintains a cautious mode amid volatile sentiment for the US dollar, which is at a two-month high, and political conflict in Russia that is weighing on oil demand.
However, the crude oil market has to wait for the release of important economic data, namely the Personal Consumer Expenditure Index (PCE) at 8.30 tonight.
Oil prices may face the risk of short-term profit-taking early next week if the results of the first round of French legislative elections on June 30 show support for right-wing groups pushing to halt green energy development.
