June 22, 2024
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Oil Prices Rise Over Economic Growth

Oil prices climbed on Friday, poised to conclude the week higher after two consecutive weeks of losses. The uptick came as a top U.S. official expressed optimism about economic growth, coupled with ongoing supply concerns driven by conflicts in the Middle East.

According to Reuters, Brent crude futures increased by 47 cents to reach $89.48 a barrel, while U.S. West Texas Intermediate crude futures rose by 44 cents to $84.01 a barrel, both representing gains of around 0.5%.

Throughout the week, Brent crude has surged by 2.4%, while WTI has seen a more modest increase of 0.9%.

Treasury Secretary Janet Yellen’s remarks to Reuters on Thursday contributed to the positive sentiment, as she suggested that U.S. GDP growth for the first quarter could be revised higher, with expectations of easing inflation after various “peculiar” factors dampened economic performance to its lowest level in nearly two years.

While data indicated a slowdown in economic growth for the first quarter, Yellen’s comments hinted at a stronger underlying performance than initially suggested.

Prior to her remarks, concerns over accelerating inflation had weighed on oil prices, with investors speculating that the Federal Reserve might delay interest rate cuts until September.

Moreover, ongoing tensions in the Middle East continued to fuel supply concerns, further boosting oil prices.

Israel’s intensified airstrikes on Rafah, coupled with plans to evacuate civilians from the southern Gazan city and launch a comprehensive assault despite warnings from allies, contributed to the apprehension in the region.

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