Oil Poised for Largest Weekly Gains in 3 Months

Oil prices jumped Friday and are heading for their biggest weekly gain since early June, with both major crude benchmarks rising more than 4% this week. The rally comes as stronger-than-expected U.S. economic data could make the Federal Reserve more cautious about cutting interest rates further.

Brent crude futures climbed 15 cents to $69.57 per barrel by 0100 GMT, while U.S. West Texas Intermediate rose 23 cents to $65.21 per barrel. Both benchmarks posted their largest weekly increase since the week ending June 13.

The oil surge reflects growing concerns that the Fed might slow down its rate-cutting cycle. Last week, the central bank cut rates by 25 basis points in its first reduction since December and signaled more cuts could come. But recent economic data showing resilience in the U.S. economy could change that calculus.

Lower interest rates typically boost oil demand by making it cheaper for businesses and consumers to borrow money, which stimulates economic activity. When the Fed hints at fewer rate cuts, it can dampen expectations for increased energy consumption.

For oil markets, this creates a delicate balance. Traders are weighing whether the U.S. economy is strong enough to support higher oil demand against the possibility that the Fed might keep rates higher for longer. The 4% weekly jump suggests investors are betting that economic strength will win out, at least in the near term.

This week's price action marks a notable shift after oil struggled for much of the summer. The question now is whether this momentum can sustain itself as markets digest more economic data and Fed signals in the coming weeks.