An aerial view shows an oil factory of Idemitsu Kosan Co. in Ichihara
An aerial view shows an oil factory of Idemitsu Kosan Co. in Ichihara, east of Tokyo, Japan November 12, 2021, in this photo taken by Kyodo. Mandatory credit Kyodo/via Reuters

Oil prices rose by more than a dollar a barrel on Friday as supplies tightened in some parts of the world and U.S. inflation data indicated price rises were slowing.

The most actively traded Brent futures, for June delivery, were up $1.05 or 1.3% at $79.65 a barrel by 12:55 p.m. EDT (1655 GMT). Brent futures for May delivery, which will expire upon settlement later on Friday, rose 44 cents or 0.6% to $79.71 a barrel.

West Texas Intermediate crude (WTI) for May delivery rose $1.11, or 1.5%, to $75.48 a barrel, having gained about 8% so far this week.

Data on Friday showed the U.S. Personal Consumption Expenditure (PCE) index, the Federal Reserve's preferred inflation gauge, rose 0.3% in February on a monthly basis, compared with a 0.6% rise in January and an expectation of a 0.4% rise in a Reuters poll.

Signs inflation is slowing tend to support oil prices as this could point to less aggressive interest rate hikes from the Fed, lifting investor demand for risk assets like commodities and equities.

Oil prices were also buoyed after producers shut in or reduced output at several oilfields in the semi-autonomous Kurdistan region of northern Iraq following a halt to the northern export pipeline.

With prices recovering from recent lows, the Organization of the Petroleum Exporting Countries and allies led by Russia are likely to stick to their existing output deal at a meeting on Monday, sources said.

OPEC pumped 28.90 million barrels per day (bpd) this month, a Reuters survey found, down 70,000 bpd from February. Output is down more than 700,000 bpd from September.

If current levels hold, oil prices will record their second straight week of gains, but Brent and WTI were also set to record monthly declines of 5% and 2% respectively, their steepest since November.

The benchmarks hit their lowest since 2021 on March 20 in the wake of large bank failures, and while they have recouped some of the losses since then, they remain well below the levels at which they were trading at the start of March.

"The prolonged economic scarring of the last month will likely slow the economy, if not cause a recession, and lower interest rate expectations are not enough to support oil prices in the short term," said Craig Erlam, senior markets analyst at OANDA.