Oil prices saw an uptick on Friday, driven by heightened tensions in the Middle East. However, gains were limited by a strong US dollar and inflation data, dampening hopes for imminent interest rate cuts by the Federal Reserve.
Brent crude futures settled at $89.50 a barrel, up 0.55%, while US West Texas Intermediate (WTI) crude futures settled at $83.85 a barrel, marking a 0.34% increase. Despite recent tensions between Israel and Iran, prices had declined over the past two weeks.
The Middle East remained a focal point as Israel’s prime minister, Benjamin Netanyahu, addressed concerns over potential rulings by the International Criminal Court regarding Hamas’ attacks on Israel. Israel’s military actions in Lebanon and Gaza added to regional tensions.
Geopolitical uncertainties continued to provide some support to oil prices, counteracting negative pressures from growing inflation highlighted by US economic data. The Federal Reserve is expected to maintain interest rates in light of rising inflation, as indicated by market reactions.
US Treasury Secretary Janet Yellen suggested that economic growth for the first quarter could be revised higher, but the dollar’s strength against the yen further influenced market dynamics.
Meanwhile, OPEC Secretary General Haitham Al Ghais emphasized in an op-ed article that while alternative energy sources are crucial, the end of oil is not imminent due to ongoing energy demand growth. Instead, efforts should focus on emissions reduction rather than eliminating oil use.
