U.S. crude oil futures ended higher for a third straight session on Friday, after Fed Chairman Janet Yellen provided some clarity on possible interest rate hikes last night in Massachusetts.
For the week, crude oil futures climbed about 2.3 percent.
Yellen gave an upbeat assessment of the economy and reiterated that the Fed will likely raise rates by the year end.
“If the FOMC were to delay the start of the policy normalization process for too long, we would likely end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting its goals,” Yellen said in a prepared speech.
The speech was focused on inflation, which Yellen expects will return to 2 percent annual growth rate “over the next few years.”
Yellen focused on some of the global headwinds that the Fed cited in last week’s statement as reasons for not raising interest rates in September. Despite problems in China and Europe, Yellen does not think these issues will prove large enough “to have a significant path of the path of policy.”
In economic news, U.S. economic growth was revised higher for the April-to-June period, raising expectations that the Federal Reserve will soon raise interest rates. However, third quarter growth is expected to be slower, somewhere near 2 percent.
Light Sweet Crude Oil futures for November delivery, the most actively traded contract, gained $0.79 or 1.8 percent, to settle at $45.70 a barrel on the New York Mercantile Exchange Friday.
Crude prices for November delivery scaled a high of $46.38 a barrel intraday and a low of $44.86.
On Thursday, crude oil gained $0.43 or 1.0 percent, to settle at $44.91 a barrel, as the dollar weakened against a basket of some major currencies and with the market expecting a drop in U.S. production following the steep fall in crude prices.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.33 on Friday, up from its previous close of 96.30 in late North American trade on Thursday. The dollar scaled a high of 96.70 intraday and a low of 96.18.
The euro trended lower against the dollar at 1.1196 on Friday, as compared to its previous close of 1.1233 in North American trade late Thursday. The euro scaled a high of 1.1234 intraday and a low of 1.1118.
On the economic front, updated government data showed that the U.S. Gross Domestic Product expanded at a revised rate of 3.9 percent in the second quarter. This was revised up from the 3.7 percent growth that was reported last month.
U.S. consumer sentiment fell in September compared to the previous month, according to a survey released Friday. The University of Michigan’s final September reading on the overall index on consumer sentiment came in at 87.2, down from 91.9 in August.
French consumer confidence strengthened in September to the highest level in almost eight years, figures from the statistical office INSEE showed Friday. The consumer confidence index rose to 97 in September from 94 in the previous month, which was revised up from 93. Economists had forecast the same score of 94.0 for the month.
The Japanese government downgraded its economic view for the first time since last October as it sees risks from slowdown in China and normalization of interest rate in the U.S. In its monthly report, the Cabinet Office said Friday the economy is on a moderate recovery, while slowness can be seen in some areas.
The material has been provided by InstaForex Company – www.instaforex.com