HOUSTON (Web Desk/Reuters) – Oil prices settled higher on Friday, garnering support from tensions in the Middle East, but a strong dollar and US inflation data quashed hopes that the Federal Reserve would cut interest rates soon, giving prices a ceiling.

Brent crude futures settled up 49 cents, or 0.55 per cent, to $89.50 a barrel. US West Texas Intermediate (WI) crude futures settled up 28 cents, or 0.34pc, to $83.85 a barrel.

As far as the weekly trend is concerned, Brent and WTI gained $2.21 and 71 cents respectively. The prices were down during the past two weeks despite the Israel-Iran tensions.

Supply concerns supported prices as tensions continue in the Middle East.

Benjamin Netanyahu, Israel's prime minister, said any rulings by the International Criminal Court, which is investigating Hamas' Oct 7 attacks on Israel and Israel's military assault on Gaza, would not affect Israel's actions but would "set a dangerous precedent."

As tensions escalate, Israel's military said on Friday that its air force struck in Lebanon's West Beqaa District and killed a militant who advanced attacks against Israel.

Israel stepped up air strikes on Rafah on Thursday after saying it would evacuate civilians from city in southern Gaza and launch an all-out assault despite allies' warnings that doing so could cause mass casualties.

"Israel is not afraid to come and support themselves on their own if they have to, people are watching to see what happens between Netanyahu and Biden," said Tim Snyder, chief economist at Matador Economics.

"The geopolitical element is not over, the proxy battles going on right now will continue," and this is still providing support and helping to offset the negative pressure from the inflationary data, Snyder added.

Meanwhile, macroeconomic pressures capped gains after data released on Friday showed growing inflation.

In the 12 months through March, US inflation rose 2.7pc after an advance of 2.5pc in February. Last month's increase was broadly in line with economists' expectations.

The Fed has a 2pc inflation target. The US central bank is expected to leave rates unchanged at its policy meeting next week.

"The economic data this morning was enough for market participants to conclude that the Fed is not going to be forthcoming with interest rate cuts any time soon," said John Kilduff, partner with Again Capital LLC.

"Geopolitical jitters in the market are what is keeping us aloft. Those two competing forces should keep us in check," Kilduff added.

US Treasury Secretary Janet Yellen told Reuters on Thursday that US GDP growth for the first quarter could be revised higher, and inflation will ease after a clutch of "peculiar" factors held the economy to its weakest showing in nearly two years.

US economic growth was likely stronger than suggested by the weaker quarterly data, Yellen said. Oil prices have flip-flopped since Yellen's comments and the release of the inflation data on Friday.

Meanwhile, the dollar soared to a fresh 34-year high against the yen on Friday, bolstered in part by the US inflation data.

"Dollar strength is helping to exert negative pressure today," Kilduff said.

Elsewhere, OPEC Secretary General Haitham Al Ghais said in an op-ed article that the end of oil is not in sight, as the pace of energy demand growth means that alternatives cannot replace it at the needed scale, and the focus should be on cutting emissions not oil use.