The price of crude oil appeared ready to continue its two-week upward trend this week amidst growing strains between Israel and its neighbors, particularly Lebanon. Oil traders became bullish earlier today due to fears of a spreading Middle East conflict, as Brent crude edged closer to $87 per barrel and West Texas Intermediate crept beyond $82 per barrel.
The Energy Information Administration projected earlier this week that there is likely little demand for oil in the United States, but this hasn’t stopped the price increase. The most recent inventory data from the EIA revealed increases in middle distillates, petrol, and oil. Furthermore, it is occurring despite a surprising spike in weekly jobless claims, which was disclosed yesterday and put doubt on assertions of a robust economy by indicating that jobless claims reached their highest level in 2.5 years last week. Instead, oil traders might have observed a decline in new unemployment claims.
In other U.S. economic news, the Bureau of Economic Analysis revised its most recent estimate of GDP growth for the first quarter of the year and put it at a rather unimpressive 1.4%. This was an increase over the previous estimate of 1.3%. This was the lowest growth rate in nearly two years, according to MarketWatch. Given that consumer spending increased at its slowest rate in 18 months, there appears to be more reason for concern, according to BEA data. Yet, there was some optimism regarding oil consumption due to predictions of record-breaking travel over the July 4 weekend this year.
Oil prices did, however, rise, indicating that oil traders are not now very concerned about the status of the US economy. There were renewed concerns about a potential escalation in the Middle East war that may involve some of the region’s biggest oil producers, most notably Iran when media outlets revealed that Israel had destroyed a town in Lebanon earlier this week.
