(Reuters) – Oil prices rose on Friday, on track to end higher this week after two straight weeks of losses, after a top U.S. official expressed optimism over economic growth and as supply concerns lingered due to conflicts in the Middle East.
Brent crude futures gained 19 cents, or 0.2%, to $89.20 a barrel at 0927 GMT, and U.S. West Texas Intermediate crude futures rose by 25 cents, or 0.3%, to $83.82 a barrel.
Brent has gained 2.2% so far this week, while WTI is up 0.8%.
U.S. Treasury Secretary Janet Yellen told Reuters on Thursday that U.S. GDP growth for the first quarter could be revised higher, and inflation will ease after a clutch of “peculiar” factors held the economy to its weakest showing in nearly two years.
U.S. economic growth was likely stronger than suggested by weaker-than-expected quarterly data, she said.
Data showed that economic growth slowed in the first quarter, and prior to Yellen’s comments, tremors from an acceleration in inflation had weighed on oil prices as investors calculated that the Federal Reserve would not cut interest rates before September.
The personal consumption expenditures (PCE) price index excluding food and energy rising rose at a 3.7% annual rate after a 2.0% pace in the fourth quarter of 2023, the data showed.
“US GDP growth of 1.6% that … came in under expectations might also be deemed a welcome development confirming the effectiveness of the recent monetary tightening, nonetheless it was the PCE price index that drove sentiment,” PVM Oil analyst Tamas Varga said.
Elsewhere, supply concerns as tensions continue in the Middle East also buoyed prices early in the session.
Israel stepped up air strikes on Rafah after saying it would evacuate civilians from the southern Gazan city and launch an all-out assault despite allies’ warnings this could cause mass casualties.
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