In Bengaluru, oil prices remained stable on Friday as key US inflation data for May aligned with expectations, raising hopes for potential interest rate cuts by the Federal Reserve.

Brent crude futures for August, expiring on Friday, increased by 34 cents to reach $86.73 per barrel, while the more frequently traded September contract rose by 0.39 percent to $85.59.

US West Texas Intermediate crude futures climbed by 32 cents to settle at $82.06.

For the week, Brent and WTI futures saw an approximate 2 percent increase, predicting over 6 percent monthly gains.

The Federal Reserve's preferred inflation gauge, the personal consumption expenditures (PCE) price index, remained steady, matching forecasts, with an annual rise of 2.6 percent.

Market reactions were minimal, according to Charalampos Pissouros of brokerage XM.

Increased expectations of a Fed rate cut have driven a risk rally, with traders now seeing a 64 percent chance of a rate cut by September.

This potential easing could boost oil demand.

Barclays analyst Amarpreet Singh noted that oil prices are aligning with fair value estimates, with Brent crude projected to remain around $90 per barrel in the coming months.

However, concerns over Chinese demand and potential higher supply might limit further significant changes in oil prices for the latter half of 2024.

A Reuters poll projected Brent crude to average $83.93 per barrel and US crude $79.72 in 2024.