Oil extends gains Friday morning as prospects of lower Russian oil exports keep prices up despite increasing US inventories, writes Reuters.

A barrel of European reference crude Brent trades at USD 82.80 on Friday against USD 82.10 on Thursday afternoon. US counterpart West Texas Intermediate crude futures goes for USD 75.65 against USD 75.53.

”Higher-than-expected U.S. crude oil inventories continue to challenge the oil demand outlook, but expectations for lower Russian production have an offsetting impact,” says IG market strategist Yeap Jun Rong.

US inventories are at their highest level since May 2021. Stocks rose by 7.6 million barrels last week to total roughly 479 million barrels, informs US Energy Information Administration (EIA).

Russia expects to cut oil exports from its western ports by 25% which exceeds announced production cuts of 500,000 barrels a day.

A strong US dollar could also contribute to keeping prices up.

Minutes from the Federal Reserve’s latest assembly indicated consensus among board members that inflation and tightened labor market conditions could signal further monetary tightening, reports the news outlet.

Prospects of additional interest hikes were supported by the dollar index, which noted a consecutive four-week increase. The index is currently up 2.5% for the month.

”The focus as we close the week will be on what happens with next inflation report, will the market get more nervous on even more tightening from the Fed,” writes Reuters, citing Oanda analyst Edward Moya.