2023.01.2619:07:00UTC+00Crude Oil Jumps On Optimism About Demand

The price of crude oil showed a strong move to the upside during trading on Thursday, adding to the uptick seen in the previous session.

After inching up $0.02 or less than a tenth of a percent to $80.15 a barrel on Wednesday, crude for March delivery jumped $0.86 or 1.1 percent to $81.01 a barrel.

Crude oil benefited from optimism about the outlook for demand following the release of some upbeat U.S. economic data, including a Commerce Department report showing stronger than expected economic growth in the fourth quarter of 2022.

The report said real gross domestic product shot up by 2.9 percent in the fourth quarter after spiking by 3.2 percent in the third quarter. Economists had expected GDP to jump by 2.6 percent.

The Labor Department also released a report showing initial jobless claims unexpectedly dipped to a nine-month low in the week ended January 21st.

Separate Commerce Department reports also showed a spike in durable goods orders and a continued increase in new home sales.

"Crude prices got an unexpected boost from a U.S. economy that doesn't want to break," said Edward Moya, senior market analyst at OANDA. "Another round of US data supported the argument that this economy still could get a soft landing, which is very positive for the short-term crude demand outlook."

He added, "Improving news with China's COVID situation and a resilient US economy should keep oil prices supported above the $80 region."