Oil stable ahead of key U.S. inflation data, set for monthly drop

Oil prices were stable on Friday ahead of key U.S. inflation data which could give clues on future interest rate moves.

On the month, oil was on course for its weakest performance since November.

Brent futures, which have risen nearly 6% this week, were up 18 cents, or 0.2%, at $79.45 a barrel. West Texas Intermediate (WTI) U.S. crude was up 52 cents, or 0.7%, to $74.89, having gained about 8% so far this week.

But the contracts were set for 5% and 3% monthly drops, respectively, after hitting their lowest since 2021 earlier in the month in the wake of the largest bank failures since the 2008 financial crisis.

Oil prices have broadly recouped these losses as worries about a full-blown global banking crisis have abated after banks in the U.S. and Europe were rescued.

Markets are waiting for U.S. personal consumption expenditures (PCE) inflation figures, tracked closely by the Federal Reserve, which are due at 1230 GMT.

Economists polled by Reuters expect the core PCE index to ease to 0.4% in February from January and stay broadly steady on an annual basis at 4.7%.

On Thursday, the U.S. House of Representatives passed a bill intended to bolster U.S oil and gas production while scaling back climate initiatives.

Oil prices were buoyed after producers shut in or reduced output at several oilfields in the semi-autonomous Kurdistan region of northern Iraq following a halt to the northern export pipeline.

Also sending a bullish signal was data showing U.S. crude oil stockpiles fell to a two-year low.

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