Oil prices settled higher on Friday but posted quarterly losses as the big drop in US crude oil inventories outweighed investor concerns that <a href="https://www.thenationalnews.com/business/markets/2023/06/24/global-stock-markets-retreat-in-anticipation-of-further-interest-rate-hikes/" target="_blank">further interest rate rises </a>and <a href="https://www.thenationalnews.com/business/energy/2023/06/28/oil-prices-gain-after-near-3-slump-amid-interest-rate-fears/">inflation will dent</a> oil demand. Brent, the benchmark for two thirds of the world’s oil, gained 0.75 per cent, or $0.56, to close at $74.90 a barrel, but posted a fourth straight quarter of declines. West Texas Intermediate, the gauge that tracks US crude, rose 1.12 per cent, or $0.78, to settle at $70.64 a barrel, but declined for a second consecutive quarter. In the three months to the end of June, the benchmarks were down 6 per cent and 6.5 per cent, respectively. Crude was boosted by a US Commerce Department report on Friday which showed that annual inflation in May rose at its slowest pace in two years. However, those<a href="https://www.thenationalnews.com/business/energy/2023/06/29/oil-prices-fluctuate-after-gaining-3-on-large-draw-in-us-crude-stocks/" target="_blank"> </a>gains were limited by weak Chinese economic data. According to data from the National Bureau of Statistics released on Friday, China’s factory activity in June contracted for the third consecutive month. On Thursday, the US Energy Information Administration (EIA) announced that US crude stocks, an indicator of fuel demand, fell by 9.6 million barrels last week. Analysts polled by Reuters were expecting a decrease of 1.8 million barrels. “Oil prices are edging higher again today but given how they've traded over the last couple of months, I'm struggling to read too much into it,” said Craig Erlam, a senior market analyst at Oanda. “The inventory data on Wednesday was bullish on the face of it and the eurozone inflation data today won't do it any harm either, but uninspiring Chinese PMIs [purchasing managers' indexes] overnight don't fill me with confidence.” “Broadly speaking, it's range-bound as it has been since early May, and showing little signs of breaking in either direction. “The range is getting very gradually smaller but at such a slow pace that it doesn't really tell us much at this point. “It very much feels like traders are awaiting more information on inflation and, by extension, interest rates, and until we have a better idea of the outlook, it could remain in this pattern.” Oil prices rose slightly on Thursday after posting gains of about 3 per cent the previous day following a large drop in US crude stocks. Earlier this month, the Federal Reserve hit pause on raising interest rates for the first time since its started its monetary tightening cycle in March 2022 as it assesses the impact on the economy. It signalled it would resume raising rates again this year if needed. Its next meeting will be on July 25 and July 26. On Tuesday, European Central Bank President Christine Lagarde also said it was too early to “declare victory” over inflation. “We are seeing a decline in the inflation rate as the shocks that originally drove up inflation wane and our monetary policy actions are transmitted to the economy,” Ms Lagarde said. “But the pass-through of those shocks is still ongoing, making the decline in inflation slower and the inflation process more persistent.” Last week, the Bank of England raised its interest rates by 0.5 percentage points to 5 per cent, after inflation in the UK rose more than expected in May.
