Oil prices saw an uptick on Thursday, influenced by positive U.S. economic data which heightened expectations for increased crude demand.
Brent crude futures for September rose by 66 cents, or 0.81%, closing at $82.37 per barrel, while U.S. West Texas Intermediate crude for September gained 69 cents, or 0.89%, to settle at $78.28 per barrel.
Data from the U.S. Commerce Department revealed stronger-than-anticipated economic growth in the second quarter, alongside easing inflation.
This bolstered hopes that the Federal Reserve might lower interest rates in September, potentially stimulating economic activity and increasing oil consumption.
Bob Yawger, director of energy futures at Mizuho in New York, commented, “The U.S. GDP data implied the economy is humming along at a pretty nice rate,” suggesting a ‘soft landing’ scenario where inflation is controlled without a significant economic downturn.
Conversely, in China, oil imports and refinery activity have been subdued this year, reflecting weaker fuel demand amid slower economic growth.
UBS analyst Giovanni Staunovo noted, “While Chinese economic data remains disappointing, we are starting to see larger oil inventory draws, which suggests supply growth lags demand growth.”
This statement followed China’s central bank’s unexpected interest rate cut to support its weakening economy.
Earlier in the trading session, both Brent and WTI crude prices had dropped by over a dollar per barrel.
In Canada, widespread wildfires in British Columbia and Alberta, particularly near the oil sands hub of Fort McMurray, raised supply concerns, though forecasts for rain offered some relief.
Meanwhile, diplomatic efforts to secure a ceasefire in Gaza between Israel and Hamas have gained traction.
John Evans, an analyst at oil broker PVM, remarked, “With continued, and according to some sources, conciliatory developments in Gaza peace talks, oil prices are finding it increasingly hard to hang on to intermittent rallies.”
Despite these talks, Israeli forces continued operations in southern Gaza, with Israeli Prime Minister Benjamin Netanyahu affirming to U.S. lawmakers his commitment to bringing hostages home.