BENGALURU: Oil prices were steady on Friday after key US inflation data for May was largely in line with expectations, lifting hopes that the Federal Reserve could start cutting interest rates this year, according to Reuters. Brent crude futures for August settlement, which expired on Friday, were up 34 cents, or 0.4 percent, at $86.73 a barrel by 4:05 p.m Saudi time. The more liquid September contract was up 0.39 percent at $85.59. US West Texas Intermediate crude futures rose 32 cents, or 0.4 percent, to $82.06. Brent and WTI futures have risen nearly 2 percent this week, with both benchmarks on track for monthly gains of more than 6 percent. The US personal consumption expenditures price index — the Federal Reserve’s preferred inflation gauge — was flat, in line with expectations. On an annual basis, PCE inflation rose 2.6 percent, as forecast. Reaction in financial markets was minimal. For oil traders, the release passed unnoticed, said Charalampos Pissouros, senior investment analyst at brokerage XM. Growing expectations of an imminent Fed easing cycle have sparked a risk rally across stock markets. Traders are now pricing in a 64 percent chance of a first Fed rate cut in September, up from 50 percent a month ago, according to the CME FedWatch tool. Easing interest rates could be a boon for oil because it could increase demand from consumers. “Oil prices have been converging with our fair value estimates recently, revealing the underlying strength in fundamentals through a clearing in the fog of war,” Barclays analyst Amarpreet Singh wrote in a client note. Barclays expects Brent crude to remain around $90 a barrel over the coming months. Oil prices might not change much in the second half of 2024, with concern over Chinese demand and the prospect of higher supply from key producers countering geopolitical risks, a Reuters poll indicated on Friday. Brent crude is expected to average $83.93 a barrel in 2024 with US crude avergaing $79.72, the poll found.