US GDP Comes in Higher than Expected
July 28, 2023
The energy markets were up again yesterday as a solid bullish move higher has now taken front-month WTI crude oil to its 200-day moving average. A break and settlement above that level could bring in more buying.
The market was influenced by US GDP coming in higher than expected. The US Bureau of Economic Analysis reported yesterday that 1st estimate of US GDP for Q2 2023 came in at 2.4%, which was much higher than the 2.0% expected by economists and above the high end of the range of expectations being (+0.3%, +2.2%). Consumer spending rose more than expected by 1.6% versus an expected 1.5%. These data points are good for energy demand and offers support to prices. Jerome Powell also said that the US economy might avoid a recession which brings the concerns about tight supplies to the forefront. Traders have been shifting to more focus on tight supplies versus the worries about demand destruction from a weak economy. This has driven the current bullish rally that energy prices have been on over the last few weeks.