© Reuters. FILE PHOTO: The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. Picture taken November 22, 2019. REUTERS/Angus Mordant/File Photo
SINGAPORE (Reuters) -Oil prices edged higher on Friday after minutes from a Federal Reserve meeting suggested inflation was under control and as U.S. Secretary of State Antony Blinken prepared to visit the Middle East to try and prevent the Israel-Gaza conflict from widening.
futures were up 32 cents, or 0.4%, to $77.91 a barrel, while U.S. West Texas Intermediate crude futures rose 43 cents, or 0.6%, to $72.62 at 0739 GMT.
Both benchmarks, which are on track to end the first week of the year higher, had nearly recouped all losses from Thursday, when prices settled lower in a choppy session due to massive weekly gasoline and distillate stock builds. [API/S] [EIA/S]
While the minutes of the Fed meeting did not provide direct clues about when interest rate cuts might commence, the discussions signalled a growing sense that inflation is under control and rising concern about the risks that an “overly restrictive” monetary policy may hold for the economy.
Lower interest rates reduce consumer borrowing costs, which can boost economic growth and demand for oil.
Also adding to supply concerns were developments in the Middle East, where Israeli forces are planning a more targeted approach in the north and further pursuit of Hamas leaders in the south, its defence minister said on Thursday.
Aiming to help prevent the conflict from expanding, Blinken was set to travel on Thursday to the Middle East for a week of diplomacy, the State Department said.
U.S. Energy Information Administration data showed gasoline stocks had last week registered their highest week-on-week rise in more than 30 years, while distillate products supplied, a proxy for demand, fell to its lowest level since 1999.
But the bearish data was offset by geopolitical concerns, hopes of economic recovery on potential easing of interest rates and lingering shipping concerns.
“There is still plenty of tension in the Middle East with Houthi rebels launching a sea drone in the Red Sea, a US airstrike in Baghdad,” ING analysts said in a report on Friday.