Oil prices gain following upward revision of US GDP

The front-month ICE Brent contract gained $1.29/bbl to settle at $79.94/bbl on Thursday, after the US Department of Commerce revised upward its GDP estimate for the second quarter.

PHOTO: Oil barrels with the US Dollar in the background. Getty Images

Oil prices reacted positively to the news as it showed the country's economic growth in the second quarter of this year was better than previously estimated.

The US gross domestic product (GDP), a key indicator of demand growth and consumer spending activity, increased at an annualised rate of 3% in the second quarter of this year, up from the initial estimate of 2.8%, the commerce department’s Bureau of Economic Analysis (BEA) said.  

The increase primarily reflected growth in consumer spending, prompting market analysts to project a growth in crude oil demand in the world’s largest oil-consuming nation.

“The key influence on crude sentiment on Thursday was an upward revision in the US’ second-quarter GDP growth to 3% from 2.8% in the initial estimate,” VANDA Insights’ founder and analyst Vandana Hari said.

By Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online