© Reuters.

Investing.com– Oil prices edged higher Friday, and were set for a muted finish to the week as reports of renewed calls for a Israel-Hamas ceasefire pointed to fewer supply disruptions in the Middle East.

By 08:55 ET (12.55 GMT), the futures traded 0.3% higher at $81.33 a barrel and the contract climbed 0.3% to $86.01 a barrel.

Both benchmarks are on track for minor gains this week. 

Gaza ceasefire, strong dollar spur limited profit-taking 

Reuters reported that the U.S. is set to table a United Nations draft resolution for an immediate ceasefire in Gaza, with the move expected by as soon as Friday. 

A ceasefire represents a de-escalation in the Israel-Hamas war, and could potentially clear some uncertainty over supply disruptions stemming from the conflict- particularly Houthi attacks along shipping routes in the Red Sea. 

U.S. Secretary of State Antony Blinken also said that he believed talks in Qatar could bring a Gaza ceasefire. 

Reports of the ceasefire, coupled with renewed strength in the dollar, resulted in early losses Friday.

Tighter supply bets keeps oil elevated

However, the market stabilized near the four-month highs seen earlier in March on the prospect of tighter global supplies and improving demand. 

U.S. unexpectedly shrank in the week to March 15, while major members of the Organization of Petroleum Exporting Countries signaled they were reducing their oil exports.

Russia launched the largest missile and drone attack on Ukrainian energy infrastructure of the war to date on Friday, hitting the country’s largest dam and causing blackouts in several regions, Kyiv said.

Ukraine has in recent weeks masterminded a series of attacks on Russian energy infrastructure. 

Expectations of tighter supplies were also accompanied by an improving outlook for demand, especially in the face of a stronger U.S. economy, and a potential recovery in China. 

U.S. grew more than expected in March, while remained in expansion, purchasing managers index data showed on Thursday.

(Ambar Warrick contributed to this article.)