Oil edges up on strong US GDP data but Asia economic woes limit gains
2024.07.25 21:11
By Laila Kearney
(Reuters) – Oil prices were up slightly on Friday on stronger-than-expected U.S. economic data that raised investor expectations for increasing demand from the world’s largest energy consumer.
But concerns about soft economic conditions in Asia’s biggest economies, China and Japan, capped gains.
futures for September rose 7 cents to $82.44 a barrel by 0014 GMT. U.S. West Texas Intermediate crude for September increased 4 cents to $78.32 per barrel.
In the second quarter, the U.S. economy grew at a faster-than-expected annualised rate of 2.8% as consumers spent more and businesses increased investments, Commerce Department data showed. Economists polled by Reuters had predicted U.S. gross domestic product would grow by 2.0% over the period.
At the same time, inflation pressures eased, which kept intact expectations that the Federal Reserve would move forward with a September interest rate cut. Lower interest rates tend to boost economic activity, which can spur oil demand.
Still, continued signs of trouble in parts of Asia limited oil price gains.
Core consumer prices in Japan’s capital were up 2.2% in July from a year earlier, data showed on Friday, raising market expectations of an interest rate hike in the near term.
But an index that strips away energy costs, seen as a better gauge of underlying price trends, rose at the slowest annual pace in nearly two years, suggesting that price hikes are moderating due to soft consumption.
China, the world’s biggest crude importer, surprised markets for a second time this week by conducting an unscheduled lending operation on Thursday at steeply lower rates, suggesting authorities are trying to provide heavier monetary stimulus to prop up the economy.
