Oil prices held largely steady on Thursday following the release of U.S. economic data and ahead of crude stockpiles data.
Brent futures were down 37 cents, or 0.44%, to $83.23 a barrel as of 1410 GMT, while U.S. West Texas Intermediate (WTI) crude fell 22 cents, or 0.28%, to $79.01.
Both benchmarks are headed for monthly losses, with Brent futures on track for a decline of more than 5% from last month, while WTI was poised for a slide of over 3.5%.
Data released on Thursday by the Commerce Department showed U.S. gross domestic product grew 1.3% January-March, down from an advance estimate of 1.6%, following downward revisions to consumer spending.
Meanwhile, jobless claims data from the Labor Department came in at 219,000 in the last week, higher than a forecast by economists polled by Reuters of 218,000. “US GDP data matched expectations and initial jobless claims slightly exceeded forecasts, which is “rate-cut” friendly if anything,” said PVM analyst Tamas Varga. Investors are focussing closely on when major central banks may begin to cut interest rates, because higher borrowing costs tend to tie down funds and consumption, which can negatively impact crude demand. Sticky inflation has led investors to adjust expectations that the U.S. Federal Reserve will start cutting rates in September at the earliest, compared to a June start that had been expected by markets at the beginning of the year.
Investors will shortly switch focus to U.S. inventory data from the Energy Information Administration (EIA) on Thursday for clues on the current state of demand.
Preliminary data from market sources citing American Petroleum Institute figures on Wednesday suggested U.S. crude oil inventories fell last week, down 6.49 million barrels against analyst projections of a 1.9 million barrel draw.
“The broader risk-off environment has translated to some downward pressures on oil prices, which overrides the larger-than-expected drawdown in U.S. crude inventories from the recent API data,” said Yeap Jun Rong, market strategist at IG.
Investors will also be looking ahead to an OPEC+ meeting this weekend to decide on whether to extend, deepen or unwind supply cuts for the rest of the year.
Rising global oil inventories through April due to soft fuel demand may strengthen the case for OPEC+ producers, which include the Organization of the Petroleum Exporting Countries (OPEC)) and allies including Russia, to keep supply cuts in place when they meet on June 2, OPEC+ delegates and analysts say.