Oil headed for its biggest weekly advance since April after rising the most in more than six years as U.S. economic growth beat forecasts.
Futures climbed as much as 2.1 percent in New York, extending a 10 percent rally on Thursday. U.S. gross domestic product increased at a 3.7 percent annualized rate in the second quarter, exceeding all projections in a Bloomberg survey of economists. The nation’s crude stockpiles declined last week, paring a surplus, government data showed Wednesday.
Oil is poised for its first weekly gain in nine weeks, sustaining a rebound above $40 a barrel as concerns eased over a slowdown in the U.S. and China. Prices fell Monday to the lowest close since February 2009 and are still down almost 20 percent this year on signs a global supply glut will persist.
“The volatility in the market will continue,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone. “Any rallies are going to be quite extreme and probably short. There is adequate global oil supplies and we still have more than 450 million in U.S. stockpiles.”
West Texas Intermediate for October delivery rose as much as 90 cents to $43.46 a barrel on the New York Mercantile Exchange and was at $43.41 at 4:10 p.m. Sydney time. The contract surged $3.96 to $42.56 on Thursday. The volume of all futures traded was double the 100-day average. Prices have climbed 7.3 percent this week.
U.S. Economy
Brent for October settlement advanced as much as 89 cents, or 1.9 percent, to $48.45 a barrel on the London-based ICE Futures Europe exchange. It’s up 6.5 percent this week, also the most since April. The European benchmark crude traded at a premium of $5 to WTI, compared with $5.01 on Aug. 21.
The U.S. GDP growth figure exceeded the median estimate of 3.2 percent in the Bloomberg survey, led by increases in consumer and business spending. It’s higher than the 2.3 percent expansion the Commerce Department reported last month.
Crude inventories in the country, the world’s largest oil consumer, fell by 5.45 million barrels to 450.8 million through Aug. 21, data from the Energy Information Administration showed Wednesday. Stockpiles remain about 90 million barrels above the five-year seasonal average.
Oil must trade lower than $30 a barrel before producers will begin to curb production, according to Ed Morse, the head of global commodity research at Citigroup Inc. WTI will probably decrease below that level later this year and then recover, he said at a conference in New York on Thursday.
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