Oil Prices up as US Inflation Data Outweighs OPEC Supply Concerns

By Adedapo Adesanya

Oil prices were marginally higher on Friday after data showed an overall slowdown in US inflation, helping offset supply concerns as the Organisation of the Petroleum Exporting Countries and allies (OPEC+) is leaning towards a resumption in production increases.

Brent crude futures grew by 23 cents or 0.3 per cent to $67.75 a barrel, while the US West Texas Intermediate (WTI) crude futures expanded by 5 cents or 0.08 per cent to $62.89 per barrel.

US consumer prices increased less than expected in January amid cheaper gasoline prices and a moderation in rental inflation.

The Consumer Price Index rose 0.2 per cent last month after an unrevised 0.3 per cent gain in December, the Labor Department’s Bureau of Labor Statistics said.

The report followed news this week of an acceleration in job growth in January and a drop in the unemployment rate to 4.3 per cent from 4.4 per cent in December.

Market analysts noted that since inflation is stabilising, it may lead to interest rates probably continuing to move a little bit lower.

OPEC is leaning towards a resumption in oil output increases from April, ahead of the upcoming peak summer fuel demand, and amid firmer crude prices owing to tensions over US-Iran relations.

There are indications that this will happen when eight OPEC+ producers – Saudi Arabia, Russia, the United Arab Emirates, Kazakhstan, Kuwait, Iraq, Algeria and Oman – meet on March 1.

The eight members raised production quotas by about 2.9 million barrels per day from April to the end of December 2025, equating to about 3 per cent of global demand, and froze further planned increases for January through March 2026 because of seasonally weaker consumption.

OPEC’s latest oil market forecasts show demand for OPEC+ crude in the second quarter falling by 400,000 barrels per day from the first three months of the year, but demand for the whole year is projected to be 600,000 barrels per day higher than in 2025.

Oil prices had strengthened earlier in the week on concerns that the US could attack Middle Eastern oil producer Iran over its nuclear programme. The US is sending an aircraft carrier from the Caribbean to the Middle East on Friday, a move that would put two carriers in the region as tensions soar between the two countries.

The US also eased sanctions on Venezuela’s energy sector on Friday, issuing two general licenses that allow global energy companies to operate oil and gas projects in the OPEC member and for other companies to negotiate contracts to bring in fresh investments.

On the US supply side, Baker Hughes said oil rigs fell by three to 409 this week.