WASHINGTON (dpa-AFX) - Despite hot inflation data dimming hopes of an early interest rate cut by the Federal Reserve, oil prices edged higher on Friday on optimism about the outlook for oil demand and concerns about supply.
The dollar's rise limited oil's gains. The dollar index climbed to 106.19 before paring some gains. Still, at 105.95, the index was up nearly 0.35% from the previous close.
West Texas Intermediate Crude oil futures for June ended higher by $0.28 or about 0.34% at $83.85 a barrel. WTI crude futures gained about 0.85% in the week.
Brent crude futures settled at $89.50 a barrel, gaining $0.49 or about 0.55%.
Data from the Commerce Department showed the Federal Reserve's preferred measure of inflation, the personal consumption expenditures price index, exceeded expectations on an annual basis in March.
The report said the annual rate of consumer price growth accelerated to 2.7% in March from 2.5% in February. Economists had expected the pace of growth to tick up to 2.6%.
The annual rate of growth by core consumer prices in March came in unchanged from February at 2.8%, while economists had expected the pace of growth to slow to 2.6%.
Data released by Energy Information Administration (EIA) earlier in the week showed that overall U.S. inventories shrank more than expected in the past week, indicating some tightness in global oil markets.
The EIA said crude oil inventories plunged by 6.4 million barrels last week after jumping by 2.7 million barrels in the previous week. Economists had expected crude oil inventories to increase by 1.6 million barrels.
At 453.6 million barrels, U.S. crude oil inventories are about 3 percent below the five-year average for this time of year, the EIA added.
The report also said gasoline inventories edged down by 0.6 million barrels last week and are about 4 percent below the five-year average for this time of year.
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