Oil settles higher on Middle East supply concerns, US inflation data limits gains; Brent at $89/barrel | Mint – Mint

Crude oil prices stabilized higher in the previous session, benefiting from support from tensions in the Middle East, but the strength of the US dollar and US inflation data dispelled hopes for an upcoming reduction in interest rates by the American Federal Reserve, thus limiting the rise in crude prices. Still, concerns over oil supplies have supported prices as tensions continue in the Middle East.

Brent crude futures rose 49 cents, or 0.55 percent, to $89.50 a barrel. U.S. West Texas Intermediate crude futures rose 28 cents, or 0.34 percent, to $83.85 a barrel. As for domestic prices, crude oil futures fell 0.06 percent to ₹6,995 per barrel on the multi-commodity exchange (MCX).

What affects crude oil prices?

-Benjamin Netanyahu, Israel’s prime minister, said any decision by the International Criminal Court, which is investigating Hamas’s attacks on Israel and the military assault, would not affect Israel’s next actions, but would “create a dangerous precedent.

– The Israeli military said its air forces struck in Lebanon’s West Bekaa district and killed a militant who had launched attacks against Israel. Israel has stepped up its airstrikes on Rafah after announcing it would evacuate civilians from the southern Gaza city and launch an all-out attack despite warnings from its allies that it could cause high casualties.

-Analysts said the geopolitical element is not over, ongoing proxy battles will continue, which continues to provide support and help offset the negative pressure from inflationary data.

-Macroeconomic pressures limited gains after data released Friday showed rising inflation. In the 12 months to March, US inflation rose 2.7 per cent following a 2.5 per cent rise in February.

Last month’s increase was broadly in line with economists’ expectations. The US Fed has an inflation target of 2 percent. The US central bank is expected to leave rates unchanged at its policy meeting next week.

“This morning’s economic data was enough for market participants to conclude that the Fed is not going to announce any interest rate cuts in the near future,” said John Kilduff, partner at Again Capital LLC.

“The market’s geopolitical concerns are what’s keeping us on our toes. These two competing forces should keep us in check,” Kilduff added.

U.S. Treasury Secretary Janet Yellen told Reuters on Thursday that U.S. GDP growth for the first quarter could be revised upward and inflation would slow after a series of “peculiar” factors kept the economy at its lowest level in almost two years.

U.S. economic growth was likely stronger than weaker quarterly data suggests, Yellen said. Oil prices have reversed course since Yellen’s comments and the release of inflation data on Friday.

Meanwhile, the dollar hit a fresh 34-year high against the yen on Friday, supported in part by US inflation data.

“The strength of the dollar today is contributing to negative pressure,” Kilduff said.

Separately, OPEC Secretary General Haitham Al Ghais said in an opinion piece that the end of oil is not in sight, as the rate of growth in energy demand means alternatives cannot not replace it on the scale necessary, and that the emphasis should be on reduction. emissions and not oil consumption.