Oil prices ticked higher on Friday as signs of economic recovery in the US and Japan strengthened the demand outlook at a time when fuel stocks ahead of the northern winter are running low.
New York crude futures, which closed early ahead of Labor Day, settled US$0.07 up to US$31.57 per barrel. Brent crude in London rose US$0.05 to US$29.48 a barrel.
News that the US economy grew faster than thought in the second quarter, and that Japanese industrial output rose more than expected last month gave fresh signals that global economic recovery may be gathering pace.
Before the market opened, the US Department of Commerce said GDP rose at a revised 3.1 percent in the second quarter of this year, boosted by defense spending, business investment and consumer expenditures. That was up from 2.4 percent estimated a month ago and raised hopes the momentum would carry into the current quarter.
US gasoline demand, which drains 12 percent of world oil supply is already strong, with record consumption draining stocks to their lowest level in nearly three years.
The upcoming Labor Day holiday weekend will see 28.2 million people driving 80 kms or more -- an eight-year high and up 2.2 percent from a year ago -- according to the American Automobile Association.
Oil prices have risen more that 25 percent over the past four months as export disruptions from Venezuela, Nigeria and Iraq prevented US stocks rebuilding after being run down during a severe northern hemisphere winter.
Heating oil stocks in the US are 20 percent below last year. The US government this week also reported a smaller-than-anticipated climb in supplies of fellow heating fuel natural gas, leaving stockpiles well below year-ago levels and sharpening the threat of a supply crunch in a cold winter.
Venezuela and Nigeria are still pumping below optimum levels, and occupation powers in Iraq face stubborn sabotage and looting in their efforts to restore output.
While Iraqi production is improving officials are worried that could be temporary amid sabotage that has repeatedly disabled a key export pipeline from the north, which Turkish officials say should resume operation on Thursday.
A top US Army commander said on Thursday Iraqi output stood at 1.7 million barrels per day (bpd) as of Wednesday. Prewar Iraqi production capacity was 2.8 million bpd with export capacity of 2.2 million bpd.
Japanese technology giant Softbank Group Corp said Tuesday it has sold its stake in Nvidia Corp, raising US$5.8 billion to pour into other investments. It also reported its profit nearly tripled in the first half of this fiscal year from a year earlier. Tokyo-based Softbank said it sold the stake in Silicon Vally-based Nvidia last month, a move that reflects its shift in focus to OpenAI, owner of the artificial intelligence (AI) chatbot ChatGPT. Softbank reported its profit in the April-to-September period soared to about 2.5 trillion yen (about US$13 billion). Its sales for the six month period rose 7.7 percent year-on-year
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