Oil up 1% ahead of key US data

Oil prices went up over 1 per cent on Friday ahead of key U.S. economic data, after over 1 per cent increased in the last session on cuts to OPEC production targets.

By 0339 GMT, crude futures fell 11 cents to $94.31 a barrel. After hitting $89.37 per barrel, the highest since Sept. 14, WTI crude futures fell 5 cents to $88.40 a barrel.

A stronger dollar added pressure on oil prices amid a chorus of hawkish Federal Reserve speakers signalling further tightening of central bank policy.

Fed officials stressed that the inflation fight was ongoing and they were not prepared to change course, as Fed officials showed no intention of backing down from the most aggressive rate hike campaign in decades.

The U.S. nonfarm payrolls report is due later on Friday, with economists forecasting 250,000 jobs to have been added last month, compared to 315,000 in August.

Oil is leaking lower in Asia, which is unusual after a big run up heading into the weekend, especially against rising U.S. yields and a stronger dollar providing the downdraft and triggering some pre-weekend and pre-nonfarm payroll profit-taking, according to Stephen Innes, managing partner at SPI Asset Management.

Both benchmarks were headed for weekly gains, which was fuelled by OPEC's production cut from the Organization of Petroleum Exporting Countries and allies including Russia, which is the largest reduction since 2020 and comes ahead of a European Union embargo on Russian oil. The decision would add to inflation and squeeze supplies in an already tight market.

Market sentiment was already bearish in anticipation of a weaker global economy, and this decision should tighten the market's sentiment, analysts at ANZ Research said in a note.

ANZ added that global demand growth is expected to come under pressure due to tighter monetary policy and China's ongoing COVID-related movement restrictions.

U.S. President Joe Biden expressed disappointment on Thursday over OPEC's plans and said the United States was looking at all possible alternatives to keep prices from rising.

Some options include releasing more oil from the Strategic Petroleum Reserve or a curb on energy exports by U.S. companies.