By Alex Nussbaum
“The market is leaning into the upside, probably pricing in a little more geopolitical risk premium,” said Phil Flynn, a senior markets analyst at Price Futures Group Inc. “People are going to be hesitant to be short over the weekend with all the Middle East tensions.”
But crude remains down almost 4% for the month amid fears about sluggish demand growth. The U.S. Commerce Department on Friday said gross domestic product expanded by an annualized 2.1% in the second quarter as trade disputes sapped exports and business investment. Growth was down from the first quarter although still better than forecast.
“The headline number looks OK but the underlying statistics reflect the weakness,” said Cailin Birch, a global economist at the Economist Intelligence Unit in London. “It’s a sign that economic growth is definitely slowing, so the question is when do we start to feel the real pain?”
West Texas Intermediate for September closed up 18 cents at $56.20 a barrel, notching its fifth increase in six days on the New York Mercantile Exchange. Brent for September settlement gained 7 cents to $63.46 on the ICE Futures Europe Exchange.
See also: Permian Oil Prices Dip to 2-Month Low as West Texas Stocks Swell
Iran test-fired a ballistic missile that traveled 1,000 kilometers (620 miles), escalating tensions after a series of attacks on tankers and drones. The missile didn’t pose a threat to shipping in the region, CNN Pentagon correspondent Barbara Starr tweeted, citing an unnamed U.S. official.
While U.S. crude stockpiles dropped by 10.8 million barrels in a report this week — offering another sign of shrinking supplies — the large decline was mostly attributed to the short-term impact of Hurricane Barry, which halted output from parts of the Gulf of Mexico. U.S. production slid the most since October 2017.
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