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Oil prices edged higher on Friday on optimism from the OPEC producer group that oil demand will be robust in 2024 as it also nudged up its expectations for global economic growth.

Brent crude rose 7 cents to settle at $86.47 a barrel at 0017 GMT, while U.S. West Texas Intermediatecrude futures gained 12 cents at $82.94 a barrel.

Both benchmarks have been on a sustained rally since June, with West Texas Intermediate crude (WTI) trading on Thursday at its highest this year and Brent hitting its best price since January.

Prices have rallied on the back of extensions to output cuts by Saudi Arabia and Russia, alongside supply fears driven by the potential for conflict between Russia and Ukraine in the Black Sea region to threaten Russian oil shipments.

The Organization of the Petroleum Exporting Countries said on Thursday it expects world oil demand to rise by 2.25 million barrels per day (bpd) in 2024, compared with growth of 2.44 million bpd in 2023. Both forecasts were unchanged from last month.

In 2024, "solid" economic growth amid continued improvements in China is expected to boost oil consumption, it added.

Also lifting market sentiment, Thursday's U.S. consumer prices data for July fuelled speculation the Federal Reserve is nearing the end of its aggressive rate hike cycle.

Offsetting these upside price drivers to some extent, data this week showed the consumer sector in China fell into deflation and factory gate prices extended declines in July, raising concerns about fuel demand in the world's second-largest economy.