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© Reuters.
By Peter Nurse
Investing.com -- Oil prices rose Thursday, adding to the previous session’s sharp gains, boosted by optimism generated by record U.S. crude exports as well as doubts about the effectiveness of the proposed price cap on Russian oil.
By 09:10 ET (13:10 GMT), U.S. crude futures traded 1.7% higher at $89.42 a barrel, while the Brent contract rose 1.2% to $94.91.
Both contracts gained around 3% last session, putting them on course for a weekly gain, after data released by the Energy Information Administration on Wednesday showed U.S. crude exports surging to a record-high 5.1 million barrels a day, suggesting resilience in global demand despite rising inflation and interest rates.
“Weekly trade flows may be less accurate and do fluctuate widely, but it is no surprise that the U.S. is emerging as the barrel of last resort as Europe pivots away from Russia,” analysts at Citi said, in a note.
This positive tone continued Thursday, boosted by the news that the U.S. economy, the world’s largest, rebounded from six months of contraction in the third quarter, as gross domestic product grew by 2.6% on a year-on-year basis.
This represented a rebound from declines of 0.6% and 1.6% in the first and second quarters, respectively, and pointed to economic resilience in the U.S., the largest consumer of crude in the world, despite aggressive interest rate raises by the Federal Reserve.
Meanwhile, U.S. and Western officials are said to be finalizing plans to impose a cap on Russian oil prices, but doubts are emerging about how effective such a policy will be.
Bloomberg News reported that these officials were being forced to scale back plans for the price cap, with fewer participating countries and a higher price level.
This follows a warning from the World Bank that any plan will need active participation of emerging market economies to be effective.
Elsewhere, an IEA report forecasting a peak in global demand for fossil fuels within a decade as the energy crisis sparked by the Ukraine war speeds up the transition to green energy had little impact on sentiment.
In corporate news, Europe's two largest energy companies Shell (LON:RDSa) and TotalEnergies SE (EPA:TTEF) reported profits of more than $9 billion in the third quarter, benefiting from the high fuel prices.
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