Oil prices rose on Thursday after strong U.S. economic data boosted expectations for higher crude demand, but gains were limited by concerns about lower oil imports from China.
September Brent crude futures rose 66 cents, or 0.81%, to $82.37 a barrel. September WTI crude rose 69 cents, or 0.89%, to $78.28.
The U.S. Commerce Department data on Thursday showed the U.S. economy grew faster than expected in the second quarter, inflation eased and raised expectations that the Federal Reserve will cut interest rates in September. Lower interest rates are expected to boost economic activity, which in turn should boost oil consumption.
U.S. GDP data showed the economy is progressing at a relatively good pace. That’s a sign of a soft landing, and a sign that inflation is being brought under control without causing a painful recession or a major rise in unemployment.
China’s oil imports and refining activity are lower this year than in 2023, according to government data, due to weak fuel demand amid slowing economic growth.
As Chinese economic data continues to disappoint, we are starting to see larger oil inventory draws, suggesting that supply growth is lagging behind demand.
Earlier on Thursday, China’s central bank unexpectedly cut interest rates to support its flagging economy.
In Canada, hundreds of wildfires are burning in the western provinces of British Columbia and Alberta, including in the oil sands hub of Fort McMurray. However, the region is expected to receive some rain this weekend, easing supply concerns.
Efforts to reach a ceasefire agreement between Israel and Hamas to end the war in Gaza have gained momentum in the past month. A positive breakthrough could lower prices by removing ongoing threats to supply.
But with ongoing and, according to some sources, conciliatory developments in the Gaza peace talks, oil prices are finding it increasingly difficult to hold on to intermittent recoveries.
