US economic report supports oil

Brent crude's price has gained after the US Department of Commerce released its revised GDP estimate for the second quarter of this year.

IMAGE: Getty Images

The US' gross domestic product (GDP), a key indicator of demand growth and consumer spending activity, increased at an annualised rate of 3.3% in the April–June period, according to the second estimate released by the US Commerce Department’s Bureau of Economic Analysis (BEA).

The oil market has reacted positively to the news as the country's second quarter GDP gained after noting a 0.5% contraction in the first quarter of this year.

“The increase in real GDP in the second quarter primarily reflected a decrease in imports… and an increase in consumer spending,” the BEA said.

The data has boosted market expectations of economic progress in the US, which could in turn support demand growth for commodities like crude oil.

Oil market’s sentiment has turned positive after “the US Commerce Department on Thursday revised the estimate for second-quarter GDP growth from 3% to 3.3%,” remarked VANDA Insights’ founder Vandana Hari.

By Aparupa Mazumder

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