Oil prices advanced on Friday as investors await OPEC+ decisions on supplies, expected to extend voluntary production cuts for the second quarter of the year.

Reuters sources indeed confirmed that OPEC+ is preparing to extend production cuts potentially to the end of the year, with the decision taken in the first week of March. 

On trading, Brent May futures rose 2%, or $1.64 to $83.55 a barrel, marking a weekly profit of 3.4%.

US crude futures due in April closed 2.2% higher, or $1.71 to $79.97 a barrel, clocking in a weekly profit of 4.55%. 

The dollar declined against most major rivals on Friday following weak data and speculation about Fed policies. 

Recent data showed US personal spending rose 0.3% in January m/m, and 2.4% y/y, slowing down slightly from December.

Core spending rose 0.4% m/m in January, and 2.8% y/y, also slowing from December.

Such data showed that inflation is ever so slightly losing steam in accordance with Fed’s plans. 

 Earlier data today showed the US manufacturing PMI down to 47.8 from 49.1 in January, missing estimates of 49.5. 

A Reuters/Michigan University survey showed the consumer confidence survey down to 76.9 in February from 79.6. 

The Fedwatch tool showed the markets are putting a 57.1% chance of a Fed rate cut in June. 

On trading, the dollar index fell 0.2% to 103.9 as of 20:34 GMT, with a session-high at 104.2, and a low at 103.8. 

Loonie

The Canadian dollar rose 0.1% against its US counterpart as of 21:20 GMT to 0.7375. 

Earlier Canadian data showed the manufacturing PMI at 49.7.

Aussie 

The Australian dollar rose 0.4% against its US counterpart to 0.6524 as of 21:20 GMT. 

US stock indices rose on Friday, with NASDAQ heading for a new record high following strong gains in February.

Recent data showed US personal spending rose 0.3% in January m/m, and 2.4% y/y, slowing down slightly from December.

Core spending rose 0.4% m/m in January, and 2.8% y/y, also slowing from December.

Such data showed that inflation is ever so slightly losing steam in accordance with Fed’s plans. 

Now investors are assessing the impact of the data on the Federal Reserve’s future policy decisions. 

Dow Jones rose 0.1%, or 7 points as of 15:32 GMT to 39,003, while S&P 500 rose 0.2%, or 12 points to 5108, as NASDAQ added 0.3%, or 52 points to 16,144. 

Global oil prices rose in European trade on Friday on track for the second straight session, with US crude scaling four-month highs, and on track for the third weekly profit in a month on speculation about new OPEC+ production cuts.

Prices are also boosted by hopes of improving Chinese demand on fuel following positive manufacturing and services data in February. 

Global Oil Prices

US crude rose 1.9% to $79.76 a barrel, the highest since November 7, while Brent added 1.7% to $83.36 a barrel. 

US crude lost 0.1% on Thursday, while Brent climbed 0.2% on improving risk appetite on higher-yield assets. 

Oil prices were up 2.5% on average in February, the second monthly profit in a row as the OPEC+ alliance pledges to support the market, and amid ongoing concerns about supply disruptions in the Red Sea.  

As for this week, prices are up 3% so far on track for the third weekly profit in a month.

OPEC+ 

OPEC+ is expected to extend current production cuts into the second half of the year to support prices and sap supplies.

A Bloomberg survey expects OPEC+ to extend current production cuts for a new duration, and force output limitations of upwards of 2 million bpd. 

Chinese Demand

Chinese data showed the manufacturinng PMI hit 50.9 in February, beating estimates of 50.7. 

 China’s services PMI rose 51.4 in February, the best since September, and beating estimates of 50.9.