Oil Prices Rise Amid Positive U.S. Economic Signals

Oil prices settled higher on Thursday, as positive indicators from the U.S. economy alleviated concerns about economic health, especially with a Federal Reserve rate hike expected next month.

At 14:30 ET (18:30 GMT), Brent oil futures increased by 1.5% to $80.99 a barrel, while West Texas Intermediate crude futures also rose 1.5% to $78.16 a barrel.

U.S. Retail Sales Surprises to Upside, Easing Recession Concerns

U.S. retail sales saw a larger-than-anticipated increase in July, indicating resilience in consumer spending and the potential for a soft landing. Retail sales rose by 1% last month, surpassing the expected 0.4% growth and accelerating from an unchanged reading in June, as per Commerce Department data released earlier Thursday.

The chance of lower rates spurred optimism that U.S. economic conditions will improve in the upcoming months, which could bolster demand in the world’s largest fuel consumer amid signals of slowing summer demand from weekly inventory data.

Data released on Wednesday showed an unexpected increase in U.S. inventories by about 1.4 million barrels, contrary to expectations of a reduction of 1.9 million barrels.

Mixed Chinese Economic Readings Provide Some Support

A range of economic data from China offered some encouraging signs to oil markets on Thursday. Retail sales in China grew more than expected in July, bolstered by recent rate cuts and initiatives aimed at boosting consumption by Beijing.

However, industrial production and fixed asset investment in China rose less than anticipated, and the nation’s unemployment rate unexpectedly increased. Concerns over dwindling demand from China have been a significant source of anxiety for crude markets, particularly given the ongoing challenges in the nation’s economic recovery.

Both OPEC and the IEA have revised their forecasts for oil demand growth in 2024 downward, citing fears of slowing demand from China, the top oil importer.

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