Press "Enter" to skip to content

Oil gains after strong U.S. retail sales help ease recession worries


TOKYO (Reuters) – Crude oil prices rose on Friday after two days of declines, buoyed following data showing a rise in U.S. retail sales helped ease some concerns about a recession in the world’s biggest economy.

Brent crude () was up 31 cents, or 0.5%, at $58.54 a barrel at 0047 GMT, after falling 2.1% on Thursday and 3% the previous day.

U.S. crude () was up 43 cents, or 0.8%, at $54.90 a barrel, having fallen 1.4% the previous session and 3.3% on Wednesday.

U.S. retail sales rose 0.7% in July as consumers bought a range of goods even as they cut back on motor vehicle purchases, according to data that came a day after a key part of the U.S. Treasury yield curve inverted for the first time since June 2007 prompting a sell-off in stocks and crude oil.

An inverted Treasury yield curve is historically a reliable predictor of looming recessions.

“The robust U.S. economic data released overnight is providing some degree of comfort as it suggests a less gloomy U.S. domestic outlook and will walk back some of the more immediate recessionary concerns,” Stephen Innes, managing partner at VM Markets, said in a note.

Also helping sentiment were comments from U.S. President Donald Trump that negotiations with China on trade were “productive,” suggesting a possible easing of trade frictions that have roiled markets.

The price of Brent is still up nearly 10% this year thanks to supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, a group known as OPEC+. In July, OPEC+ agreed to extend oil output cuts until March 2020 to prop up prices.

A Saudi official on Aug. 8 indicated more steps may be coming, saying “Saudi Arabia is committed to do whatever it takes to keep the market balanced next year”.

But the efforts of OPEC+ have been outweighed by worries about the global economy amid the U.S.-China trade dispute and uncertainty over Brexit, as well as rising U.S. stockpiles of crude and higher output of U.S. shale oil.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source: Investing.com