Crude oil prices are on track to post a weekly gain early today as optimism returned to the oil market following several better-than-expected reports on the US economy.
One of them was a report of retail sales in July, which rose 1% compared to the expected 0.3% increase, Reuters reported. ReportedThe increase was more notable as it followed a 0.2% decrease on a monthly basis in June.
Another Report Of particular note are the weekly unemployment insurance claims, which were lower than expected, with new claims for the week ending August 9th down 7,000 from the previous week.
“U.S. economic data released this week helped ease concerns about a sharp slowdown in the U.S. economy,” FGE said. said Reuters.
The latest data could also bolster expectations that the Fed will soon start cutting interest rates, seen as a big potential boost to oil demand, though it could also be thwarted by repeated signals from the Fed that it is in no rush to cut rates.
The oil index’s strength is notable because there are a number of bearish factors weighing on oil prices, mainly due to signs of weakening Chinese demand for oil and two revisions to global demand released this week by the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA).
Meanwhile, in the Middle East, the risk of escalating tensions remains as Israel continues its bombing of Gaza and Iran bids its time. Israel began talks with international mediators this week about a possible ceasefire, but it is unclear what good that will do, as Hamas is boycotting the talks.
“Geopolitics and the risk of escalating conflict in the Middle East are driving prices higher, with threats of retaliation becoming ever more threatening,” said Tim Snyder, chief economist at Matador Economics. said Reuters reported on Thursday.
By Irina Slav of Oilprice.com
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