U.S. gasoline sales decline, recession clouds over oil market
Crude oil prices edged lower in Asian midday trading Friday, extending yesterday's losses after a slump in U.S. consumer spending fueled recession fears and traders worried that the recession would dampen energy demand, although supplies remained tight.
Data released in the previous session showed that in May, U.S. real personal consumption expenditures fell 0.4% from a year earlier, and the gains in the previous four months were all revised downward.
Meanwhile, the Atlanta Fed's GDPNow model's forecast for U.S. GDP growth in the second quarter jumped to a contraction of 1% on Thursday, after predicting earlier in the week that it would be able to grow a modest 0.3%.
A joint quarterly survey released June 29 by Duke University's Fuqua School of Business, the Federal Reserve in Richmond and Atlanta also showed a decline in confidence among senior U.S. financial executives in the performance of the U.S. economy, with an index of confidence falling to its lowest level in 12 years.
More worrisome is that high prices have weakened fuel demand. According to a survey by energy data provider OPIS, gasoline sales at U.S. gas stations fell about 8.2 percent year-over-year in the first full week of June, the 14th straight week that sales have lagged behind 2021 levels.
On the supply side, OPEC+ concluded a two-day meeting and announced an increase in production of 648,000 barrels per day (bpd) in July and August, up from 432,000 bpd previously.
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