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Brent crude rose 93 cents, or about 1.1%, to $84.29 a barrel by
1104 GMT. U.S. West Texas Intermediate crude was up 87 cents,
also roughly 1.1%, at $79.92.
Both benchmarks rose by more than $1 earlier in the session.
Investor caution ahead of Fed Chair Jerome Powell's remarks at
the Jackson Hole Symposium lifted the safe-haven dollar to a
10-week high with its biggest rise in a month as markets waited
for word on how long interest rates would remain elevated.
A strong dollar makes oil more expensive for holders of other
currencies, denting demand.
Meanwhile, inventory draws have recently come through in
convincing fashion, Morgan Stanley analysts wrote in a note.
The bank expects Brent crude prices to be well supported around
$80 per barrel, with crude likely to remain in a deficit over
the rest of this year before returning to a small surplus in
early 2024.
However, the likelihood of crude deficits is no foregone
conclusion, said John Evans of oil broker PVM.
Talks between Turkey and Iraq's semi-autonomous Kurdistan
regional government on northern Iraqi crude oil exports are set
to continue after officials failed to reach agreement this week
on a resumption of exports.
Turkey stopped Iraqi oil flows via Ceyhan port on March 25 after
losing a long-standing arbitration case brought by Iraq.
Iran's oil minister, meanwhile, has been quoted by state media
as saying he expects the country's crude oil output to hit 3.4
million barrels per day (bpd) by the end of September, even
though U.S. sanctions remain in place.
Elsewhere, U.S. officials are drafting a proposal that would
ease sanctions on Venezuela's oil sector, paving the way for
more companies and countries to import its crude oil.
Norway's Equinor on Friday said it started production at its
extended Statfjord Ost field six months ahead of schedule.
"The support to oil prices from previous production cuts has
ebbed," Haitong Futures analysts said.
Several analysts expect Saudi Arabia to extend its voluntary oil
production cut of 1 million bpd for a third consecutive month
into October.
(Reporting by Natalie Grover, Laura Sanicola and Muyu Xu;
editing by David Goodman and Jason Neely)
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