Oil hits three-month highs as strong U.S. consumer spending underpins growth hopes
Oil prices rose on Friday, hitting three-month highs after data showed record online spending by U.S. consumers, stoking faith in the world’s no. 1 economy even before the hoped-for end to the trade war between Washington and Beijing.
Brent crude futures were up 6 cents, or 0.1%, at $67.98 a barrel , after rising to as high as $68.10, the highest since September. The West Texas Intermediate contract was up 11 cents, or 0.2%, at $61.79 a barrel.
A survey on Thursday showed that online holiday purchases by U.S. consumers reached a record, beating analysts’ expectations and sending U.S. stocks to fresh.
U.S. consumers are “showing few signs of tightening their purse strings, which is positive for oil also,” said Stephen Innes chief Asia market strategist at Axi Trader.
Oil prices have also been buoyed by robust hopes that the New Year will usher in an end to the long-running U.S.-China trade tariff war, a dispute that has overshadowed global economic growth prospects and left question marks over future demand for crude.
The lingering ripple effect of the trade row showed up again in data from Japan, the world’s third-biggest economy, on Friday showing that industrial output shrank for a second month in November.
Still, the price Brent has jumped more than a quarter in 2019, while WTI is up around 35%, boosted by moves by the OPEC and other producers, including Russia, to curb production. Earlier this month OPEC and its allies agreed to extend and deepen those cuts.
“The short-term momentum remains positive although I expect Asia to content itself with remaining on the sidelines today,” said Jeffrey Halley, senior market analyst, at OANDA.