By Arunima Kumar

BENGALURU (Reuters) – Oil prices rose on Friday and were on course for a third straight weekly jump, buoyed by growing expectations that the U.S. Federal Reserve will soon start cutting interest rates and in anticipation of U.S. inflation data due later in the day.

futures for August settlement, which expire on Friday, were up 64 cents, or 0.74%, to $87.03 a barrel by 1105 GMT. The more liquid September Brent contract was up 0.67% at $85.83 a barrel.

U.S. West Texas Intermediate crude futures for August delivery rose 68 cents, or 0.83%, to $82.42 a barrel.

Brent and WTI futures have gained nearly 2% this week, with both benchmarks on track for gains of slightly more than 6% month on month.

U.S. personal consumption inflation data, the Fed’s preferred measure of inflation, is due to be released at 1230 GMT.

“With the rates market looking for two rate cuts from the Fed by the end of this year, the price data will serve as validation for whether expectations are being overly dovish,” said Yeap Jun Rong, a market strategist with IG.

Growing expectations of an imminent Fed easing cycle have sparked a risk rally across stock markets. Traders are now pricing in a 64% chance of a first Fed cut in September, up from 50% a month ago, according to the CME FedWatch tool.

“Increasing bets about a September rate cut, and two by December, are likely to weigh on Treasury yields and the U.S. dollar, thereby allowing oil prices to continue marching north,” said Charalampos Pissouros, senior investment analyst at brokerage XM.

Easing interest rates could be a boon for oil as it could increase demand from consumers.

A recovery in physical refining margins also buoyed markets, with the Singapore complex refining margins on average $1 higher in June than in May at around $3.60 a barrel.

Capping gains was political uncertainty in France that have a knock-on effect on oil demand.