Oil prices rose on Friday, supported by tensions in the Middle East. The strong dollar and US inflation data dashed hopes that the Fed would soon support prices by cutting interest rates.
Brent crude oil futures rose 49 cents, or 0.55%, to $89.50 a barrel. WTI crude oil futures rose 28 cents, or 0.34%, to $83.85 a barrel.
While tensions continued in the Middle East, supply concerns supported prices.
Netanyahu said any decision by the International Criminal Court, which is investigating Hamas’ attacks on Israel on October 7 and Israel’s military attack on Gaza, would not affect Israel’s actions but would “set a dangerous precedent.”
As tensions increased, Israel attacked Lebanon’s Western Bekaa Region and said it killed a militant who was furthering attacks against Israel. Israel has stepped up airstrikes on Rafah after saying it would evacuate civilians from the city on the south of Gaza and launch an all-out offensive despite warnings from its allies that it could cause mass casualties.
Meanwhile, macroeconomic pressures capped gains after US data released on Friday showed rising inflation.
The Fed’s inflation target is 2 percent. In the 12 months through March, US inflation increased by 2.7%, following a 2.5% increase in February. Last month’s increase was generally in line with economists’ expectations.
In this case, the US central bank is expected to leave interest rates unchanged at next week’s policy meeting.
In fact, geopolitical tensions are keeping the market afloat.
US Treasury Secretary Janet Yellen said US economic growth was likely stronger than weak quarterly data suggests, and the US GDP growth in the first quarter could be revised higher and inflation would fall after “bizarre” factors kept the economy at its weakest outlook in nearly two years.
Oil prices fell sharply after Yellen’s statements and inflation data released on Friday.
Meanwhile, the dollar rose to a 34-year high against the yen on Friday, boosted in part by U.S. inflation data.
The strength of the dollar helps create negative pressure.
