Brent crude oil rose on Thursday after poor economic data from the US gave investors reason to believe the Fed wouldn't roll back its stimulus program in the near future. The commodity approached $102 and traded at $101.93 at 8:02 GMT on Thursday morning.
CNBC reported that the US government released a trimmed annual economic growth rate forecast of 1.8 percent, down from the original 2.4 percent estimate. The figure, which was an annual estimate from first quarter GDP, indicates that the US economy could still have a few gaps keeping it from steady growth and recovery. The news led many to believe that the US central bank will have to think twice before cutting its $85 billion per month stimulus.
Although the prospect of continued quantitative easing from the Fed has supported Brent prices, the figures pose a double edged sword as they also indicate a lack of demand growth in the number one oil consuming nation.
Rising gasoline inventories in the US kept a lid on gains from the weak GDP data, though, as most were expecting stocks to be depleted during the summertime driving season. The US Energy Information Administration released data on Wednesday that showed gasoline stocks grew by 3.65 million barrels for the week ending on June 21st. This came as a surprise to analysts who had been expecting gains of just 900,000 barrels.
Next week, US nonfarm payrolls data will be released and could drive Brent prices as many are using the figures to determine the Fed's timeline for rolling in its stimulus. However, Brent is poised to end its third consecutive quarter at a loss as the commodity has fallen 8.5 percent so far.
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