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Oil prices rise slightly as US inflation data and optimism about OPEC's supply outweigh OPEC's concerns

The oil prices have risen marginally on 'Friday, after data revealed a slowdown in U.S. inflation. This has helped to offset concerns about supply as OPEC+ is 'leaning toward a resumption of production increases.

Brent crude futures settled 23 cents or 0.3% higher at $67.75 per barrel while U.S. West Texas intermediate crude settled 5 cents or 0.08% more at $62.89

Both benchmarks have posted weekly losses after suffering near 3% drops on Thursday. Brent fell by about 0.5% and WTI dropped by 1% during the week. U.S. consumer price increases were lower than expected in January, thanks to cheaper gasoline and a moderated?increase in rental inflation.

Looks like inflation has stabilized. It's a good thing that interest rates will continue to fall. Dennis Kissler is the senior vice president for trading at BOK Financial. He said that as interest rates begin to fall, it will be a positive for the economy.

He added that "the negative will be if OPEC increases production a bit more." Investors reacted negatively to a report that OPEC was leaning toward a resumption of oil production increases in April. This is due to the upcoming peak'summer fuel demand and firmer crude price owing to tensions between U.S. and Iran relations. Baker Hughes reported that oil rigs in the U.S. fell from 409 to 399 this week. Prices of oil had risen earlier in the week due to fears that the U.S. might attack Middle Eastern oil producer Iran because of its nuclear program. Prices fell on Thursday after U.S. president Donald Trump said that Washington might reach a deal with Iran in the next month.

U.S. officials announced on Friday that the Pentagon is sending a plane?carrier to the Middle East from the Caribbean. This would mean two aircraft carriers in the area as tensions between Iran and the United States rise. Russia said that the next round in peace talks over Ukraine would take place next Monday.

Kissler added that negotiations with Iran and Russia will be near-term market movers. He also said that global crude supplies are ample in the short-term and crude futures have likely been baked in a geopolitical premium of $5 to $7 per barrel. On Friday, the U.S. eased sanctions against?Venezuela’s energy sector by issuing two licenses that will allow global energy firms to operate oil & gas projects in OPEC member Venezuela and other companies to negotiate new contracts for fresh investment. Chris Wright, the U.S. Secretary for Energy, told NBC News that oil sales from Venezuela controlled the U.S. totaled over $1 'billion and will reach $5 'billion in the next few months.

The U.S. Commodity Futures Trading Commission reported on Friday that money managers increased their net long U.S. Crude futures and option positions during the week ending February 10. Reporting by Arathy S. Somasekhar and Robert Harvey. Editing by Susan Fenton and Kirby Donovan.

(source: Reuters)