Oil pricesup 1pc on supply cuts

NEW YORK: Oil prices climbed about 1 percent on Friday, supported by supply cuts despite weak economic news from Germany, a stronger U.S. dollar and the prospect of more U.S. rate hikes.

Brent futures rose 96 cents, or 1.2 percent, to $84.32 a barrel by 1616 GMT. U.S. West Texas Intermediate (WTI) crude rose 78 cents, or 1.0 percent, to $79.83.

For the week, Brent was down about 1 percent and WTI down about 2 percent. Last week, both benchmarks fell about 2 percent.

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.

"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+ began limiting supplies in late 2022 to bolster the market and in June extended supply curbs into 2024.

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.