LONDON, May 24 (Reuters) - Oil prices were stable on Friday but poised to show a weekly loss under pressure from lingering concerns that sticky inflation could prolong higher interest rates and curb fuel demand.
Brent crude futures fell by 25 cents, or 0.31%, to $81.11 a barrel by 1151 GMT. U.S. West Texas Intermediate (WTI) crude futures were down 21 cents, or 0.27%, at $76.66.
At those levels the two benchmarks were close to three-month lows. On Thursday Brent closed at its weakest since Feb. 7 and U.S. WTI futures at their lowest since Feb. 23.
The contracts were heading for weekly declines of about 3.4% and 4.2% respectively, with Brent set for a fifth consecutive daily decline for its longest losing streak of the year.
"The backdrop of potentially higher-for-longer rates weighed significantly on oil prices this week," said Phillip Nova analyst Priyanka Sachdeva.
Minutes released on Wednesday from the Fed's latest policy meeting showed policymakers were questioning whether interest rates are high enough to tame stubborn inflation.
Some officials said they would be willing to raise borrowing costs again if inflation surged. Fed Chair Jerome Powell and other policymakers, however, have since said they feel further increases are unlikely.
"Inflation surprises this year, coupled with solid activity, are likely to take rate cuts off the table for now. There also seems to be strong consensus that policy is in restrictive territory, and so hikes are probably not necessary either," Bank of America analysts said.
Higher interest rates increase the cost of borrowing, which can slow economic activity and dampen demand for oil.
"Macroeconomic developments have been failing to provide meaningful support for oil," PVM analyst Tamas Varga said. "It is a fair bet that rate cuts are slipping away."
Investors will be turning their attention to a June 2 online meeting of the OPEC+ producer group comprising the Organization of the Petroleum Exporting Countries and its allies to discuss whether to extend voluntary oil output cuts of 2.2 million barrels per day.
"After the OPEC+ meeting the market is likely to increasingly focus on demand again. The upcoming Memorial Day weekend marks the start of the summer driving season in the U.S.," said Commerzbank analyst Barbara Lambrecht.
U.S. gasoline product supplied, a proxy for demand, reached its highest level since November in the week to May 17, the Energy Information Administration (EIA) said on Wednesday.
Reporting by Robert Harvey in London, Georgina McCartney in Houston and Jeslyn Lerh in Singapore Editing by David Goodman
