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Oil Prices Set for Second Week of Gains on Signs Demand Improving

Crude oil futures were little changed on Friday but were set to rise for a second week amid signs of improving demand and falling oil and fuel inventories in the U.S., the world’s biggest oil consumer.

Brent futures for August settlement dipped 15 cents to $85.56 a barrel by 0356 GMT after rising 0.8% in the previous session. U.S. West Texas Intermediate crude futures for August delivery was down 14 cents to $81.15 per barrel.

The July contract expired on Thursday at $82.17 a barrel, up 0.7%. Prices have risen about 5% since the beginning of the month to the highest level in over seven weeks.

“The seasonal demand increase, as shown by the latest EIA data, renewed confrontation between Israel and Hezbollah, and the hurricane season could sustain price strength into the summer,” Citi analysts said in a note.

U.S. government data released on Thursday showed total product supplied, a proxy for the country’s demand, rose by 1.9 million barrels per day (bpd) on the week to 21.1 million bpd.

The Energy Information Administration (EIA) data showed a drawdown in U.S. crude stockpiles by 2.5 million barrels in the week ending June 14 to 457.1 million barrels, compared with analysts’ expectations for a 2.2-million-barrel draw.

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