By Georgina McCartney
(Reuters) – Oil prices rose in early trading on Friday as traders took into account comments from the U.S. Treasury secretary that the country’s economy is likely in a stronger position than weak data indicates in the first quarter, coupled with supply concerns as conflict continues in the Middle East.
Brent crude futures gained 34 cents, or 0.38%, to $89.35 a barrel by 1211 GMT, and U.S. West Texas Intermediate crude futures rose 33 cents, or 0 .39%, to $83.90 per barrel.
Treasury Secretary Janet Yellen told Reuters on Thursday that U.S. economic growth was likely stronger than weaker-than-expected quarterly data suggested.
Yellen said U.S. GDP growth for the first quarter could be revised upwards once more data becomes available, and that inflation will return to more normal levels after a series of “peculiar” factors kept the economy at its weakest result in almost two years.
Data showed economic growth slowed in the first quarter and, before Yellen’s comments, jolts from accelerating inflation had weighed on oil prices as investors believed the Federal Reserve would not cut rates. interest rate before September.
Personal consumption expenditures (PCE) inflation data for March will be released Friday, closely followed by the Fed’s 2% target.
Elsewhere, supply concerns linked to continued geopolitical tensions in the Middle East also boosted prices at the start of the session.
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 it could cause widespread casualties.
(Reporting by Georgina McCartney in Houston; editing by Leslie Adler)
