Oil prices increased in early trading on Friday, driven by a range of factors including ongoing supply concerns due to conflicts in the Middle East and statements from U.S. Treasury Secretary Janet Yellen that the country’s economy may be stronger than suggested by weak first-quarter data. Brent crude futures rose by 34 cents to $89.35 a barrel, while U.S. West Texas Intermediate crude futures increased by 33 cents to $83.90 a barrel at 1211 GMT.
Yellen told Reuters that U.S economic growth could be stronger than indicated by the latest quarter’s data, and that first-quarter GDP growth might be revised upwards once more data is available. She also mentioned that inflation is expected to return to normal levels after several unusual factors affected the economy, leading to its weakest performance in almost two years. The Federal Reserve’s decisions regarding interest rates have also influenced oil prices, with concerns about inflation acceleration weighing on investor sentiment.
Additionally, market participants are awaiting the release of Personal Consumption Expenditures (PCE) inflation data for March, a key indicator closely monitored by the Fed to gauge progress toward its 2% target. Geopolitical tensions in the Middle East have also supported oil prices, with heightened conflicts leading to supply concerns such as Israel intensifying airstrikes in Rafah and announcing plans to evacuate civilians from the city, potentially triggering a full-blown assault despite warnings from allies about potential mass casualties. Overall, these various factors have contributed to the rise in oil prices in early trading on Friday.