Oil Rises As Analysts Suppress Demand Fears Due To Conflicting Data

But a dearth of evidence supports the optimism on other fronts: File Image/Pixabay

Yet more evidence contradicting chronic analytical fears about demand were brought to light on Thursday, enough to somewhat suppress bearish sentiment and cause another round of mild gains for two key crude benchmarks.  

As of 1747 GMT, Brent was up 58 cents to $82.29 per barrel, and West Texas Intermediate was up 73 cents to $78.32.

The U.S. Commerce Department's advance report on second-quarter gross domestic product released on Thursday showed Q2 GDP increases of a 2.8 percent rate, faster than expected, and core PCE price index rises at a 2.9 percent rate.

The only negative aspect of the report was a regression of the housing market recovery plus a widening of the trade deficit; the otherwise solid gains in consumer spending and business investment coupled with subsiding inflation pressures stoked expectations of a September interest rate cut from the Federal Reserve.

Bob Yawger, director of energy futures at Mizuho, said, "The U.S. GDP data implied the economy is humming along in a pretty nice rate; it's an indication that we're going to have a soft landing."

Previously gloomy analysts even had good things to say about China, usually a source of disappointment due to its sluggish economic growth.

Giovanni Staunovo, analyst at UBS, said, "While Chinese economic data remains disappointing, we are starting to see larger oil inventory draws, which suggests supply growth lags demand growth"; his remarks followed China's central bank unexpectedly cutting interest rates.

And even though  no evidence existed to support the sentiment, analysts again expressed confidence that ceasefire talks between Israel and Hamas were gaining ground.

John Evans, analyst at PVM, wrote in a note, "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."

The note was presumably published as Israeli forces advanced deeper into some towns on the eastern side of Khan Younis in southern Gaza on Thursday.