Treasury Secretary Janet Yellen mentioned in an interview with Reuters that the U.S. economy may be stronger than initially thought, despite weak first-quarter data. This news raised concerns about oil supply, causing Brent crude futures to rise by 0.38% to $89.35 a barrel and U.S. West Texas Intermediate crude futures to increase by 0.39% to $83.90 a barrel on Friday.
Prior to Yellen’s comments, worries about escalating inflation had been affecting oil prices, as investors speculated that the Federal Reserve might delay interest rate cuts until September. The release of Personal Consumption Expenditures (PCE) inflation data for March on Friday will be closely monitored by the Fed as it aims to achieve its 2% inflation target.
However, supply concerns heightened as tensions continued to rise in the Middle East, where Israel increased airstrikes on Rafah in Gaza and indicated plans for a significant military assault, despite warnings from allies about potential mass casualties. The situation in the region contributed to the overall uncertainty surrounding oil markets, further raising concerns about supply disruptions and price volatility in the oil market.
In summary, while Yellen’s comments boosted investor confidence and caused oil prices to rise early on Friday, ongoing economic and geopolitical factors continue to influence oil prices and market conditions, highlighting the importance of monitoring these developments closely for investors seeking profitability in this volatile marketplace.
