Oil prices rise as economic data and easing trade tensions boost demand hopes

Oil prices rose on Thursday, reversing the previous day's losses, driven by stronger-than-expected economic data from top oil consumers and easing trade tensions. Brent crude futures rose 0.39% to $68.79 a barrel, while US West Texas Intermediate crude futures were up 0.47% at $66.69. U.S. crude inventories fell by 3.9 million barrels, and China's June crude oil throughput was up 8.5% from a year ago, implying stronger fuel demand.

Oil prices surged on Thursday, reversing the previous session's losses, driven by stronger-than-expected economic data from top oil consumers and signs of easing trade tensions. Brent crude futures rose 27 cents, or 0.39%, to $68.79 a barrel, while U.S. West Texas Intermediate crude futures were up 31 cents, or 0.47%, at $66.69 [1].

The U.S. Energy Information Administration reported that U.S. crude inventories fell by 3.9 million barrels to 422.2 million barrels last week, a steeper decline than forecasts for a 552,000-barrel draw, suggesting stronger refinery activity, tighter supply, and increased demand [1]. China's June crude oil throughput was up 8.5% from a year ago, indicating stronger fuel demand [1].

The U.S. central bank's latest snapshot of the economy showed activity picked up in recent weeks, but the outlook was "neutral to slightly pessimistic" as businesses reported that higher import tariffs were putting upward pressure on prices [1]. China's economic growth slowed in the second quarter but not by as much as previously feared, thanks to front-loading to beat U.S. tariffs [1].

President Donald Trump's offer of optimism about a trade deal with Beijing and hints of a trade deal with India and Europe eased fears of trade tensions dampening fuel demand [1]. However, trade tariffs could still slow down global economic growth and, consequently, fuel demand, putting downward pressure on prices [1].

Oil prices have been volatile, with prices seesawing in a tight range due to signs of steady demand from increased travel during the Northern Hemisphere summer competing with concerns over the economic impact of U.S. tariffs [2]. The European Commission is preparing to target $84.1 billion worth of U.S. goods for possible tariffs if talks with Washington fail, and Trump has threatened a 30% tariff on EU imports from August 1 [2].

OPEC's monthly report forecast that the global economy would do better in the second half of the year, boosting the oil demand outlook [2]. However, U.S. crude, distillate, and gasoline stocks rose last week, with crude stocks rising by 839,000 barrels, gasoline inventories rising by 1.93 million barrels, and distillate stocks rising by 828,000 barrels [2].

The WTI crude oil price bounced from the session lows of about $66.52 to trade at about $68.56 on Friday, trading within an ascending channel formation in the 60-minute chart [3]. The 14-hour RSI supports a bullish bias, with the price nearing overbought conditions [3].

Oil prices settled marginally lower on Wednesday as U.S. fuel inventory builds and concerns about the wider economic impact from U.S. tariffs outweighed some signs of increasing demand [4]. Brent crude futures settled 19 cents, or 0.3%, lower at $68.52 a barrel, while U.S. West Texas Intermediate crude futures were down 14 cents, or 0.2%, at $66.38 [4].

References:
[1] https://ca.finance.yahoo.com/news/oil-rises-demand-hopes-economic-002831179.html
[2] https://www.marketscreener.com/quote/index/S-P-GSCI-PETROLEUM-INDEX-46869201/news/Oil-prices-steady-as-investors-weigh-trade-war-impact-50518709/
[3] https://fxdailyreport.com/wti-crude-oil-bounces-off-session-lows-to-trade-at-about-68-56/
[4] https://finance.yahoo.com/news/oil-prices-gain-demand-expectations-011547775.html