Oil set for weekly gains

Oil is set for a modest weekly gain as futures remain in a tight range and focus remains on the outlook for supply and inflation. Brent crude was trading above $83 a barrel after a two-day rally that saw futures gain nearly 1%, while U.S. crude was near $79. The decline in U.S. crude inventories and the disappearance of signs that U.S. inflation could ease have competed in recent sessions with views from groups including the International Energy Agency that demand growth will weaken. Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova Pte, said there were few clear drivers for oil this week, with “the market floor currently a jigsaw puzzle of mismatched demand and supply forecasts” from institutions such as OPEC and the IEA. She also weighed softer U.S. inflation data, saying it “has not eased uncertainty about the pace and timeline of the Fed’s rate cut.” Crude oil has been trading higher since the start of the year, even as futures have fallen since April as the geopolitical risk premium from Middle East tensions has eased. The OPEC+ group is expected to agree to continue current production cuts at its June 1 meeting, with some members demanding higher capacity levels.