WTI edges lower to near $83.50 amid a weaker demand outlook following US GDP
- The WTI price depreciates on a weaker demand outlook following US GDP data released on Thursday.
- US Treasury Secretary Janet Yellen said that US GDP growth for Q1 could be revised higher as more data becomes available.
- Israel intensifies air strikes on Rafah, disregarding cautions from allies regarding the risk of significant civilian casualties.
West Texas Intermediate (WTI) crude Oil price trades near $83.40 per barrel, showing a slight decrease of 0.10% during the European hours on Friday. The US Gross Domestic Product Annualized (Q1) expanded at a slower pace of 1.6% compared to the previous reading of 3.4%, falling short of market expectations of 2.5%. This slowdown suggests potential headwinds or slowdowns in various sectors of the US economy, which could lead to reduced demand for Oil as economic activity moderates.
In contrast, US consumer prices have shown resilience, with the Personal Consumption Expenditures (QoQ) Price Index for Q1 increasing at a 3.7% annual rate. This exceeded both market expectations of 3.4% and the previous reading of 2.0%.
The WTI Oil price received support from remarks made by US Treasury Secretary Janet Yellen. Yellen stated in an interview with Reuters on Thursday that US GDP growth for the first quarter could potentially be revised higher as more data becomes available. Additionally, Yellen mentioned that inflation is expected to return to more normal levels after certain "peculiar" factors disrupt the economy.
However, the price of black Gold was supported by potential supply risks related to the conflict in the Middle East, particularly stemming from the possibility of an Israeli invasion of the southern Gaza city of Rafah.
As per a Reuters report, recent developments indicate heightened tensions in the region, with Israel intensifying air strikes on Rafah following its announcement to evacuate civilians from the southern Gazan city and proceed with an all-out assault, despite warnings from allies about the potential for mass casualties.