Oil rises after Fed

Oil prices rose on Friday after Federal Reserve meeting minutes indicated that inflation was under control as US Secretary of State Antony Blinken prepared for a tour of the Middle East to prevent escalation in the conflict between Israel and Gaza.

By 0229 GMT, Brent crude futures rose 37 cents, or 0.5 percent, to $77.96 per barrel. US West Texas Intermediate crude futures increased 50 cents, equivalent to 0.7 percent, to $72.69.

The two benchmark crude oils recovered almost all of the losses they incurred on Thursday, when settlement prices recorded a decline after a volatile session due to a large weekly increase in gasoline and distillate stocks. Both prices are heading to end the first week of the year on the rise.

The minutes of the US Central Bank meeting did not provide direct indications about when interest rate cuts might begin, but the discussions showed a growing feeling that inflation is under control and growing concern about the risks of “excessive tightening” of monetary policy on the economy.

Lower interest rates reduce consumer borrowing costs, which may boost economic growth and demand for oil.

Concerns about supplies increased due to developments in the Middle East, as the Israeli Defense Minister said on Thursday that the forces intend to follow a new, more targeted approach in the northern part of the Gaza Strip and continue to pursue the leaders of the Palestinian Islamic Resistance Movement (Hamas) in the south.

The US State Department said that Secretary Blinken will head to the Middle East to make diplomatic efforts over a week with the aim of preventing the conflict from expanding.