LONDON: Oil prices extended gains on Thursday after U.S. economic data that could allay fears of an imminent recession in the world’s biggest economy, though concerns over slower global demand curbed the rally.
Data showed U.S. retail sales rose more than expected in July while another report showed a smaller than expected increase in the number of Americans filing for unemployment benefits.
Brent crude futures were up 92 cents, or 1.2%, at $80.68 a barrel at 1329 GMT. U.S. West Texas Intermediate crude futures rose 95 cents, or 1.2%, to $77.93.
Global oil demand growth slowing: IEA
“The U.S. retail sales data, along with the U.S. unemployment claims number, provided a plethora of positive news for the markets,” said Naeem Aslam of Zaye Capital Markets.
Both benchmarks fell more than 1% on Wednesday after U.S. crude inventories rose unexpectedly.
Earlier, data showing U.S. consumer prices rose moderately in July, reinforcing expectations the Federal Reserve will cut interest rates next month, lent support to the market.
Oil prices were also propped up by worries over Iran’s potential response to the killing of the leader of the Palestinian group Hamas last month. Three senior Iranian officials have said that only a ceasefire deal in Gaza would hold Iran back from direct retaliation against Israel for the assassination.
“Geopolitical risk continues to hang over the oil market. It is still unclear how and if Iran will retaliate against Israel,” ING analysts said.
But oil inventory gains raised concerns of weaker demand, analysts at ANZ said in a client note. U.S. crude oil stockpiles rose by 1.4 million barrels in the week ended Aug. 9, compared with estimates for a 2.2 million barrel draw, building for the first time since late June.
China’s factory output growth slowed in July while refinery output fell for a fourth month, underscoring the country’s spotty economic recovery, also limiting the market’s upside.
Comments