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Oil Prices Set to Break Two-Week Decline, Boosted by Economic Optimism and Middle East Tensions

Oil prices climbed on Friday, poised to close the week with gains after enduring two consecutive weeks of losses. The upswing came as a senior U.S. official expressed confidence in economic growth, coupled with persistent supply concerns stemming from conflicts in the Middle East.

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By 0640 GMT, Brent crude futures advanced by 47 cents, or 0.5%, to reach $89.48 a barrel, while U.S. West Texas Intermediate crude futures saw an increase of 44 cents, or 0.5%, reaching $84.01 a barrel.

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Throughout the week, Brent has surged by 2.4%, with WTI recording a 0.9% uptick.

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Treasury Secretary Janet Yellen’s remarks to Reuters on Thursday contributed to market optimism. Yellen suggested that U.S. GDP growth for the first quarter might receive an upward revision, and she anticipated a decline in inflation following various “peculiar” factors that had dampened economic performance, marking the weakest showing in nearly two years.

Yellen’s comments came amid data indicating a slowdown in first-quarter economic growth. Prior to her remarks, concerns regarding an uptick in inflation had weighed on oil prices, with investors speculating on the Federal Reserve’s stance on interest rates, potentially delaying any rate cuts until September.

Meanwhile, ongoing tensions in the Middle East continued to underpin prices. Israel intensified airstrikes on Rafah, announcing plans to evacuate civilians from the southern Gazan city and proceed with an all-out assault despite warnings from allies about potential mass casualties.

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