LONDON: Oil prices rose on Friday and were on track for monthly gains, benefiting from a weaker dollar which continued to be hit by concerns over the recovery of the US economy as the coronavirus ravages economic output.

Brent crude was up 34 cents, or 0.8pc, at $43.28 a barrel by 1337 GMT. On Thursday, Brent closed 1.9pc down after touching its lowest since July 10.

US crude gained 50 cents, or 1.25pc, to $40.42 after dropping 3.3pc in the previous session, also off lows not seen since July 10.

Brent is on track for a fourth month of gains and US crude is heading for a third as both rise from depths hit in April, when much of the world was in lockdown.

The dollar extended its dramatic fall on Friday and was on course for its biggest monthly drop in a decade after news on Thursday that US gross domestic product collapsed at a 32.9pc annualised rate - the steepest decline in output since records began in 1947.

Investors typically use dollar-denominated commodities as safe havens when the currency weakens and vice versa.

"Global stimulus and a weak dollar will continue to support oil prices as historically oil is seen as a hedge against inflation," said Keshav Lohiya, CEO of consultancy Oilytics.

Globally, the economic outlook has dimmed again, with increasing coronavirus infections raising the risk of renewed lockdowns and threatening any rebound, according to Reuters polls of more than 500 economists.

Weaker refining margins around the world, lower Chinese oil demand and high crude inventories are putting further pressure on oil prices, Lohiya said.

Bjornar Tonhaugen, head of oil markets at Oslo-based Rystad Energy said traders will next week closely monitor oil output increases by the Organization of the Petroleum Exporting Countries (OPEC) and its allies.

The group, known as OPEC+, collectively plans to increase production from Saturday, adding about 1.5 million barrels per day to global supply, after slashing output in the wake of the pandemic.