Oil prices rise on U.S. data, head for 3% weekly gain

© Reuters. FILE PHOTO: An aerial view shows an oil factory of Idemitsu Kosan Co. in Ichihara, east of Tokyo, Japan November 12, 2021, in this photo taken by Kyodo. Mandatory credit Kyodo/via REUTERS

By Rowena Edwards

LONDON (Reuters) -Oil prices rose as much as $1 on Friday as fresh U.S. data lowered recession fears, although an upcoming speech from the U.S. Federal Reserve chairman capped further gains.

Brent crude futures climbed 73 cents, or 0.73%, to $100.07 a barrel by 0825 GMT, while U.S. West Texas Intermediate (WTI) crude futures rose 78 cents, or 0.84%, to $92.93.

Both contracts jumped by as much as $1 in early trade after slumping by about $2 on Thursday.

Better-than-expected figures concerning the U.S. economy helped dispel fears that a recession was underway, putting the benchmark oil contracts on track for gains of around 3% for the week.

The U.S. economy contracted at a more moderate pace than initially thought in the second quarter as consumer spending blunted some of the drag from a sharp slowdown in inventory accumulation.

Additional price support came from the prospect of the Organization of the Petroleum Exporting Countries (OPEC) curbing output to offset the return of Iranian barrels to oil markets should Tehran clinch a nuclear deal with the West.

On Friday, the United Arab Emirates became the latest OPEC+ member to back a possible cut in oil production.

"The producer group is intent on safeguarding the $100/bbl price floor and as such, the downside potential appears limited," PVM analyst Stephen Brennock said.

Tehran is reviewing Washington's response to a European Union-drafted final offer to revive a nuclear deal, with the EU expecting a response soon. It is unclear, though, how quickly Iranian oil exports would resume if a deal is reached.

The market awaits fresh signals on the outlook for rate hikes from a speech from Federal Reserve Chair Jerome Powell later on Friday.

"Fed policymakers have been making hawkish overtures of late, and this stance will likely be reiterated by Powell's message," Brennock said.