Doha, Qatar: Oil prices settled higher on Friday, garnering support from tensions in the Middle East, but a strong dollar and US inflation data quashed hopes that the Federal Reserve would cut interest rates soon, giving prices a ceiling. Brent crude futures rose 49 cents to $89.50 a barrel. US West Texas Intermediate crude futures closed 28 cents higher at $83.85 a barrel, noted Al-Attiyah Foundation in its Weekly Energy Market Review.
Supply concerns supported prices as tensions continue in the Middle East. An Israeli strike in Lebanon’s Beqaa region killed two members of a Lebanese militant group, Israel’s military said in a statement on Friday. Israel also stepped up air strikes on Rafah on Thursday, after saying it would evacuate civilians from the city in southern Gaza and launch an all-out assault, despite allies’ warnings that doing so could cause mass casualties.
In the twelve months through March, US inflation rose 2.7% after an advance of 2.5% in February. The Fed has a 2% inflation target. Last month’s increase was broadly in line with economists’ expectations. The US central bank is expected to leave rates unchanged at its meeting next week.
Asian spot liquefied natural gas (LNG) prices dropped slightly for the first time in more than two months last week over expectations of weak demand, amid easing concerns around supply due to tensions in the Middle East.
