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Oil Prices rose amid Ongoing Middle East Tensions despite Constraints from Strong US Dollar and US Inflation Figures.

Crude Oil gains


Due to increased Middle East tensions, oil prices increased on Friday; but, gains were constrained by the strong dollar and U.S. inflation figures, which decreased expectations of interest rate cuts by the Federal Reserve.  U.S. West Texas Intermediate crude futures rose by 28 cents to $83.85 per barrel, or 0.34%, while Brent crude futures advanced by 49 cents to $89.50per barrel, or 0.55%. Fears regarding the availability of oil were exacerbated by tensions in the Middle East. Benjamin Netanyahu, the prime minister of Israel, batted down the possibility that Hamas’s attacks on Israel and following military operations in Gaza were influenced by decisions made by the International Criminal Court. In the West Beqaa District of Lebanon, the Israeli military launched airstrikes against a jihadist who was allegedly planning attacks against Israel. On spite of warnings from allies that there would be widespread casualties, airstrikes on Rafah, Gaza, increased after preparations to evacuate residents and begin a full-scale assault. Despite inflationary pressure, oil prices were sustained by geopolitical concerns and ongoing proxy wars. In the year ending in March, U.S. inflation increased by 2.7%, which was in line with forecasts and hampered the possibility of interest rate reductions. The Fed’s reluctance to decrease interest rates soon is implied by the economic data. The reason behind the market’s buoyancy is geopolitical worries and the economic variables that provide a counterbalance. U.S. Treasury Secretary Janet Yellen projected that inflation would decline following particular economic difficulties and that first-quarter GDP growth would be revised upward. The dollar’s value increased relative to the yen due to U.S. inflation figures. The strength of the currency was driving down oil costs. OPEC Secretary General Haitham Al Ghais promoted emission reduction initiatives while highlighting the need for energy even in the face of requests for less oil use.

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