Forexpros – Crude oil futures rose in U.S. trading on Friday as lackluster U.S. gross domestic product rates sparked talk of Federal Reserve stimulus.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at USD90.31 a barrel on Friday, up 1.03%, off from a session high of USD90.39 and up from an earlier session low of USD89.14.
The U.S gross domestic product grew 1.5% on year during the second quarter, according to advance estimates from the Commerce Department.
The numbers were largely in line with market expectations, even outpacing some.
However, growth expectations were low in the first place, as the economy continues limping along its road to recovery, which left investors concluding that while the GDP figures might not nudge the Federal Reserve to stimulate the economy right away via quantitative easing, such tools remain on the table for further use later.
Under quantitative easing, the Fed buys bonds held by banks, pumping the economy full of liquidity and weakening the greenback in the process, which makes commodities such as oil in dollar-denominated exchanges more attractive.
Meanwhile, a stronger euro bolstered oil as well.
French President Francois Hollande and German Chancellor Angela Merkel said they would do what they can to keep the eurozone intact, which bolstered the euro against the dollar and further made oil attractive.
Meanwhile, consumer sentiment figures surprised in the U.S., which bolstered oil more.
The Thomson Reuters/University of Michigan’s final reading on the overall index on consumer sentiment fell to 72.3 in July from 73.2 in June.
Analysts had expected the figure to hit 72.0, a preliminary figure for July.
On the ICE Futures Exchange, Brent oil futures for September delivery were up 1.00% and trading at USD106.31 a barrel, up USD16.00 from its U.S. counterpart.
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