(Bloomberg) -- Oil prices rose as an equity market rally carried futures prices out of an earlier slump.
West Texas Intermediate settled above $78 a barrel after earlier falling to the lowest since early June. Crude is tracking equities, which have risen on faith that the Federal Reserve will secure a soft landing for the US economy.
“We have seen a rebound across asset crosses following the publication of US GDP and core durable goods orders, which surprised to the upside, while today’s inflation indicators were weaker,” said Fawad Razaqzada of City Index and Forex.com.
Data from the US have provided upward pressure. GDP figures beat estimates, helping oil prices pare some of the earlier drop. The US reported on Wednesday that commercial crude inventories fell by 3.74 million barrels, down for a fourth week, with stockpiles of gasoline and distillates also shrinking.
Crude has eased from a peak at the start of the month amid concern about a soft demand outlook in Asia’s largest economy, as well as selling by trend-following commodity trading advisers. That has countered the lift from OPEC+ output curbs and expectations of US interest-rate cuts.
Crude imports by China — which sources supplies from across the globe including Russia, the Middle East and the Americas — were 2.3% lower in the first half on the year compared with the same period of 2023. WTI’s options skew has reached its most bearish level since early June, indicating that negative sentiment has taken hold market-wide.
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--With assistance from Julia Fanzeres.
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