Strong US GDP lifts oil prices, but Asia economic headwinds persist

Oil prices edged higher on Friday, buoyed by stronger-than-expected U.S. economic data that increased investor optimism regarding rising crude oil demand.

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However, concerns about economic softness in Asia’s largest economies, China and Japan, tempered these gains.

Price Movements

Brent crude futures for September rose by 7 cents to $82.44 per barrel as of 0014 GMT, while U.S. West Texas Intermediate (WTI) crude for September increased by 4 cents to $78.32 per barrel. The modest rise in oil prices reflects a market response to mixed economic signals that influence oil demand forecasts.

U.S. Economic Data Boosts Oil Prices

The U.S. economy outperformed expectations in the second quarter, growing at an annualized rate of 2.8%, as reported by the Commerce Department. This growth surpassed the 2.0% increase anticipated by economists surveyed by Reuters. The stronger-than-expected economic performance was driven by increased consumer spending and higher business investments, both of which are positive indicators for future oil demand.

Additionally, easing inflation pressures in the U.S. have maintained market expectations that the Federal Reserve may proceed with an interest rate cut in September. Lower interest rates are generally conducive to boosting economic activity, which can drive up oil consumption.

Concerns Over Asian Economies Limit Gains