Oil prices rose in early trade on Friday, as players took stock of the U.S. Treasury secretary’s comments that the country’s economy is likely in a stronger position than indicated by weak first-quarter data, coupled with supply concerns as conflict continues in the Middle East.
Brent crude futures gained 34 cents, or 0.38%, to $89.35 a barrel at 1211 GMT, and U.S. West Texas Intermediate crude futures rose by 33 cents, or 0.39%, to $83.90 a barrel.
Treasury Secretary Janet Yellen told Reuters on Thursday that U.S. economic growth was likely stronger than suggested by weaker-than-expected quarterly data.
Yellen said U.S. GDP growth for the first quarter could be revised higher after more data is in hand, and inflation will ease to more normal levels after a clutch of “peculiar” factors held the economy to its weakest showing in nearly two years.
Data showed that economic growth slowed in the first quarter, and prior to Yellen’s comments, tremors from an acceleration in inflation had weighed on oil prices as investors calculated that the Federal Reserve would not cut interest rates before September.
Personal consumption expenditures (PCE) inflation data for March will be released on Friday, closely tracked by the Fed for its 2% target. Elsewhere, supply concerns as geopolitical tensions continue in the Middle East also buoyed prices early in the session. Israel stepped up airstrikes on Rafah after saying it would evacuate civilians from the southern Gazan city and launch an all-out assault despite allies’ warnings this could cause mass casualties.