Crude Oil prices rose over one percent on Thursday after the release of U.S. economic data that could ease fears of an imminent recession in the world’s largest economy, though concerns that slowing global demand will reduce profits.
Data showed that US retail sales rose in July, while another report showed that the number of Americans filing for unemployment benefits rose from the intended.
Retail Sales data, a key measure of consumer spending that drives consumer price inflation, returned to expansion and rose at a robust pace of 1% from the estimates of 0.3%. In June, sales at retail stores declined by 0.2%, downwardly revised from a flat performance.
Brent crude 1.2 percent, to $80.92 a barrel. West Texas Intermediate (WTI) crude rose 1.2 percent, to $78.05. Both indexes fell more than 1 percent on Wednesday after a surprise rise in U.S. crude oil inventories.
Earlier, data showed U.S. consumer prices rose slightly in July, bolstering expectations that the Federal Reserve will cut interest rates a last month and support the market.
Oil prices were also propped up by worries over Iran’s potential response to the killing of the leader of the Palestinian militant group Hamas last month. Three senior Iranian officials have said that only a ceasefire deal in Gaza would hold Iran back from direct retaliation against Israel for the assassination.
But oil inventory gains raised concerns of weaker demand, analysts at ANZ said in a client note. U.S. crude oil prices stockpiles rose by 1.4 million barrels in the week ended Aug. 9, compared with estimates for a 2.2-million-barrel draw, building for the first time since late June.
China’s factory output growth slowed in July while refinery output fell for a fourth month, underscoring the country’s spotty economic recovery, also limiting the market’s upside.
Technical Outlook of Crude Oil Prices
Brent crude jumped more than 1.50% in US trading yesterday. Prices rose above $81.38 to reach $81.27 compared to the previous day’s close of $79.98.
On the day above, the price chart formed a head and shoulders reversal pattern, indicating future strength. However, prices should break through the $82.20 resistance at the same time as the neck of the pattern. To move up to $83.40-$84.80.
Otherwise, failure of the breakout could witness pullback towards $81.05-$79.55.
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Commodity Samachar
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