By Peter Nurse
Investing.com -- Crude oil prices gained Friday, rebounding after the weaker tone following the Federal Reserve meeting after a report suggested additional U.S, supply this year would be limited..
By 9:55 AM ET (1355 GMT), U.S. crude was up 0.7% at $71.50 a barrel, while Brent was up 0.1% at $73.16. On Wednesday, Brent settled at its highest price since April 2019, while WTI settled at its highest since October 2018.
U.S. Gasoline RBOB Futures were up 0.3% at $2.1400 a gallon.
Earlier Friday, OPEC officials received information that indicated U.S. oil output growth will likely remain limited in 2021 despite rising prices, Reuters reported. citing OPEC sources.
U.S. shale oil output usually responds rapidly to price signals, but American producers are still focusing on capital discipline and investor returns, rather than expanding supply, OPEC heard.
This discipline may not last long, with U.S. shale producers expected to lift output by between 500,000 and 1.3 million barrels a day in 2022, but for now the cartel should be able to manage the market in the short term.
This news helped the market bounce after weakness following the hawkish view the Federal Reserve took after its latest two-day meeting earlier this week, which boosted the U.S. dollar.
At 2:55 AM ET (0655 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.3% higher at 92.172, climbing to levels not seen since mid-April. The index is on course for a weekly gain of 1.8%, its largest since September.
A stronger dollar makes oil, priced in the U.S. currency, more expensive in other currencies, potentially weighing on demand. The strong gains in the greenback also provided traders with an excuse to take profit with the two benchmark crude contracts both up over 40% year to date.
Later Friday, traders will focus on the latest weekly update from Baker Hughes of the number of oil rigs for more news about U.S. supply, while the CFTC will release its weekly commitments of traders report.