Oil prices settle higher as stronger US retail sales eases demand fears

Oil prices settled higher Thursday as upbeat U.S. economy cooled jitters about the health of economy just as the Federal Reserve is widely expect to deliver a rate hike next month.

At 14:30 ET (18:30 GMT), Brent oil futures rose 1.5% to $80.99 a barrel, while West Texas Intermediate crude futures rose 1.5% to $78.16 a barrel.  U.S. retail sales surprises to upside to cool recession concerns

U.S. retail sales rose by a larger than expected amount in July, pointing to resilience in consumer spending activity and the potential of a soft landing.

Retail sales rose by 1% last month, more than the expected 0.4% growth, accelerating from an unchanged reading in June, according to Commerce Department data released earlier Thursday. 

The prospect of lower rates spurred some bets that U.S. economic conditions will improve in the coming months, helping buoy demand in the world’s biggest fuel consumer at a time when weekly inventory points to slowing summer demand. 

Data on Wednesday showed an unexpected build in U.S. inventories , by about 1.4 million barrels, against expectations for a draw of 1.9 mb. Mixed Chinese economic readings offer some support 

A slew of economic readings from China offered some positive cues to oil markets on Thursday. 

Retail sales grew more than expected in July, with the increase coming after Beijing rolled out a slew of rate cuts and measures aimed at boosting consumption.

But Chinese industrial production grew less than expected, as did fixed asset investment . China’s unemployment rate also unexpectedly rose. 

Slowing Chinese demand has been a key source of anxiety for crude markets, especially as the country struggles with a dwindling economic recovery.

The OPEC and the IEA both trimmed their outlook for oil demand growth in 2024, citing concerns over slowing demand in top oil importer in China.

(Peter Nurse, Ambar Warrick contributed to this article.)

Source: Investing.com