Oil Steadies as US Inflation Cools, Russia Vows to Cut Output

(Bloomberg) -- Oil steadied after strong gains to start the week, with US economic data signaling inflation is cooling while Russia agreed to dial back output.

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A report on Thursday showed US producer prices fell the most in seven months, building on signs that consumer price gains are slowing. Still, the Federal Reserve left interest rates unchanged and penciled in only one rate cut this year. West Texas Intermediate fluctuated between gains and losses before settling above $78 a barrel. Futures are up about 4% for the week.

Also supporting prices was news that Russia plans to compensate for exceeding its output quota by trimming production. The new pledge includes a cut of 471,000 barrels a day on top of the earlier promised 500,000 barrel-a-day reduction announced last year. The development comes as markets remain amply supplied, with traders still digesting unexpected increases in US crude and gasoline stockpiles.

Despite this week’s advance, oil has trended lower since early April on demand concerns and signs of robust supplies. The International Energy Agency said in a report Wednesday that global markets face a major surplus this decade as the shift away from fossil fuels picks up pace.

Meanwhile, attacks on ships off Yemen continue. On Thursday, a cargo vessel was on fire after being hit by two projectiles while sailing in the Gulf of Aden, the UK Navy said, marking the second significant assault in the area in as many days.

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