Investing.com -- Crude oil prices rose Thursday, boosted by signs of resilient economic activity in the U.S. as well as expectations of tighter supplies as the year progresses.
By 09:10 ET (13.10 GMT), the U.S. crude futures traded 1.3% higher at $79.83 a barrel, while the Brent contract climbed 0.9% to $83.33, with both contracts near their highest levels since mid-April.
U.S. economy shows strength
Helping the crude benchmarks take a new step forward was the news that the U.S. economy, the world's largest and biggest crude consumer, expanded by 2.4% on an annual basis in the April to June period, much higher than the expected 1.8%.
The reading accelerated from 2.0% in the first three months of the year, and suggests that the U.S. economy is remaining relatively strong despite an aggressive bout of Federal Reserve policy tightening, the latest example of which took place on Wednesday.
Crude producers to cut supplies in August
Oil markets have recorded four consecutive weeks of gains, boosted by the decisions of Saudi Arabia and Russia, the world’s biggest oil exporters, to cut an additional combined 1.5 million barrels per day, respectively, from their July production level, starting in August.
“The decision that Saudi Arabia will need to make in the coming weeks is whether they will roll this additional cut into September or start to unwind it,” said analysts at ING, in a note.
“The recent price strength might give the Saudis the confidence to start unwinding these cuts, but expectations will have to be managed and they will have to be careful how they go about it – too aggressively and it could put renewed pressure back on the market.”
U.S. inventories disappoint
That said, the crude market closed lower on Wednesday after government data showed U.S. crude inventories fell by just a quarter of expected levels last week despite an end to supply injections from the national reserve.
This raised questions about U.S. demand in a summer travel period that should logically see large draws.