Investing.com– Oil prices rose on Friday and were set for a positive end to the week as U.S. inflation comes in as expected, helped by bets on tighter supplies and persistent geopolitical unrest in the Middle East.
At 09:15 ET (13:15 GMT), Brent oil futures rose 0.7% to $89.61 a barrel, while West Texas Intermediate crude futures rose 0.9% to $84.28 a barrel.
Brent prices were trading up about 2% for the week, while WTI prices were set to add around 0.5%.
PCE inflation rises in line with expectations
U.S. inflation rose moderately in March, as the personal consumption expenditures price index increased 0.3% last month, while the data for February was unrevised to show the PCE price index gaining 0.3% as previously reported.
In the 12 months through March, inflation rose 2.7% after advancing 2.5% in February. Economists polled by Reuters had forecast the PCE price index climbing 0.3% on the month and increasing 2.6% year-on-year.
The PCE price index is one of the inflation measures tracked by the U.S. central bank for its 2% target.
Signs of sticky inflation in the country have resulted in investors reining in expectations that the Federal Reserve will start cutting interest rates in the near future, even after softer-than-expected U.S. gross domestic product data released earlier this week.
Middle East risks persist
Prices rose in recent sessions as data showed overall U.S. inventories shrank more than expected in the past week, indicating some tightness in global oil markets.
Concerns over disruptions to Middle East supplies also remained in play as Israel stepped up its strikes against Gaza. While a war with Iran did not materialize, the Israel-Hamas conflict showed few signs of stopping.
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The U.S. was also set to mobilize more military aid for Israel after President Joe Biden approved a bill earlier this week.
This kept some elements of risk premium in play for oil prices, helping them weather concerns of weaker demand and softening global growth.
Still, oil prices were trading well below five-month highs hit earlier in April, as a lack of immediate escalation in the Iran-Israel conflict saw traders price out some risk premium from crude.
(Ambar Warrick contributed to this article.)
