Oil on track for second straight weekly gain on resilient demand

London, July 7 (BNA): Oil prices rose slightly on Friday and were on track for a second consecutive weekly gain, as resilient demand led to a bigger-than-expected drop in US oil inventories, offsetting fears of rising US interest rates.

Brent crude futures rose 20 cents, or 0.3%, to $76.72 a barrel at 0304 GMT, while US West Texas Intermediate crude rose 19 cents, also 0.3%, to $71.99 a barrel.

Both benchmarks are set to rise about 2% for the second week in a row, according to Reuters.

However, the oil price gains culminated in reinforcing expectations that the US central bank is likely to raise interest rates at its July 25-26 meeting after keeping interest rates steady at 5%-5.25% in June.

Data on Thursday showed that the number of Americans filing new claims for unemployment benefits rose moderately last week, while private payrolls rose in June, raising the possibility of a Fed rate hike this month.

OPEC is likely to maintain an optimistic view of oil demand growth for next year when it publishes its first forecasts later this month, sources close to OPEC said, forecasting a slowdown from this year but still an above-average increase.

Higher interest rates increase borrowing costs for businesses and consumers, which can slow economic growth and reduce demand for oil. Investors will look for clues on the paths of rates from inflation data in the US and China next week.

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