By Adedapo Adesanya
The crude oil grades soared on Thursday on worries of supply disruptions in the Middle East supply as Israel stepped up airstrikes on Gaza’s Rafah.
Brent crude futures gained 99 cents or 1.1 per cent to sell at $89.01 a barrel and the US West Texas Intermediate (WTI) crude futures increased by 76 cents or 0.9 per cent to $83.57 per barrel.
Israel stepped up airstrikes on Rafah overnight after saying it would evacuate civilians from the southern Gazan city.
The country also launched an all-out assault despite allies’ warnings this could cause mass casualties.
Still, oil supply has not been affected.
Market analysts noted that traders continue to waver on how much geopolitical risk to price in after Israel and Iran backed away from further direct confrontation last week.
Prices also gained support on the US Treasury secretary’s comments that the US economy was performing well.
Ms Janet Yellen told Reuters that the economic growth of the US was likely stronger than suggested by weaker-than-expected quarterly data.
Before Ms Yellen’s comments, oil prices had been pressured by data showing economic growth slowed more than expected in the first quarter.
The acceleration in the world’s largest economy inflation suggested the US Federal Reserve would not cut interest rates before September.
Ms Yellen also said US GDP growth for the first quarter could be revised higher after more data is in hand and inflation will ease to more normal levels after some factors held the economy to its weakest showing in nearly two years.
“The US economy continues to perform very, very well,” Ms Yellen said in the interview.
More US data pressured the general market as US gasoline (petrol) stockpiles fell and distillate stockpiles rose in the week to April 19, according to Energy Information Administration (EIA) data on Wednesday.
Meanwhile, US crude inventories unexpectedly fell sharply last week, the EIA report also showed, as exports jumped.
The concern about US fuel demand comes amid signs of cooling US business activity in April and as stronger-than-expected inflation and employment data means the US central bank is seen as more likely to delay expected interest rate cuts.
Dipo Olowookere