Oil up on US economic data, Strait of Hormuz tanker dispute

NEW YORK: Oil prices inched up on Friday, on track for a weekly increase, boosted by upbeat US economic data and concerns over the safety of oil transport around the Strait of Hormuz.

Brent crude futures were up 32 cents to $63.71 a barrel at 12:20 p.m. EDT (1620 GMT), heading toward a weekly rise of 2%. They fell 6% last week.

US West Texas Intermediate crude rose 30 cents to $56.32 a barrel, a weekly gain of 1.2%. It fell 7.5% last week.

US economic growth slowed less than expected in the second quarter with a boom in consumer spending, strengthening the outlook for oil consumption.

"The data was net positive," said John Kilduff, partner at Again Capital Management. "GDP beat expectations... consumer spending was just off the charts, but business spending was nearly as bad as consumer spending was good."

Broader economic slowing, particularly in Asia and Europe, could weaken crude demand and kept prices in check, Kilduff said.

Next week, top US and Chinese negotiators meet for the first time since trade discussions between the world's two largest economies broke down in May after nearing agreement. Any positive outcome from the talks is expected to boost oil prices.

Reuters polls taken July 1-24 showed the growth outlook for nearly 90% of the more than 45 economies surveyed was downgraded or left unchanged. That applied not just to this year but also 2020.

A rally in equities and drop in production from Mexican state oil company Pemex also helped push oil prices up, said Josh Graves, senior commodities strategist at RJO Futures in Chicago.

"Pemex Mexico's largest oil company coming out and cutting off some of the supply could have given the market a bit of a jolt here," Graves said.

The Trump Administration said it has renewed Chevron Corp's license to drill for oil in Venezuela despite sanctions, signalling increased friendliness towards the energy sector, Graves said.

Tensions remained high around the Strait of Hormuz, the world's most important oil passageway in between the Persian Gulf and the Gulf of Oman, as Iran refused to release a British-flagged tanker it seized last week but granted India consular access to its 18 Indian crew members.

Denmark welcomed the British government's proposal for a European-led naval mission to ensure safe shipping through the strait.

The United States is separately working on a multinational maritime security initiative in the Gulf.