On Friday (August 30th) during the Asian session, international oil prices fluctuated narrowly, with US crude oil currently trading at $75.84 per barrel. Oil prices rose more than $1 per barrel on Thursday, as supply disruptions in Libya and plans to reduce production in Iraq raised concerns about global supply tightening. Additionally, the US revised its Q2 GDP growth rate to ease demand outlook concerns.

Brent crude oil futures for October rose $1.29, or 1.6%, to close at $79.94 per barrel. US crude oil futures rose $1.39, or 1.9%, to $75.91 per barrel.

Due to the confrontation between opposing political factions, more than half of Libya's oil production was shut down on Thursday, and multiple ports stopped exporting. According to calculations, about 700000 barrels of oil are shut down in the country every day.

UBS analyst Giovanni Staunovo said, "Libya's exports have been sustained so far, but with the closure of export terminals, this should translate into tight supply in the Atlantic Basin

In other regions, a source with direct knowledge of the situation said on Thursday that Iraq plans to reduce oil production in September to compensate for exceeding the production agreed upon with the Organization of the Petroleum Exporting Countries and its allies.

The source said that Iraq's production in July was 4.25 million barrels per day, and it will be reduced to 3.85 million to 3.9 million barrels per day next month. The quota agreed upon by Iraq is 4 million barrels per day.

The Iraqi Ministry of Oil has submitted a plan to OPEC to make up for the excess production quota between this month and September next year. OPEC announced last week that Iraq's cumulative production exceeded its quota by 1.4 million barrels per day from January to July.

According to sources, Iraq cancelled a one million barrel cargo ship in August to reduce its export volume for the month.

The source added that there have been bids from buyers, but the cargo of this ship is still off the market, and sales of two similarly sized ships will be postponed from August to September.

According to sources, Baghdad plans to reduce production from September, reducing exports from 3.43 million barrels per day to 3.3 million barrels per day or lower, and reducing local consumption from 570000 barrels per day to 500000 barrels per day. At the same time, the Kurdish regional government is requested to reduce production from 150000 barrels per day to 50000 barrels per day.

The expectation that the Federal Reserve will start cutting interest rates next month also supports oil prices. Atlanta Fed President Bostic said that with further declines in inflation and higher than expected increases in unemployment, it may be time to cut interest rates now.

The US economy remains resilient, with low layoffs and steady GDP growth in the second quarter, partially easing concerns about the demand outlook.

Although the labor market is slowing down, the orderly slowdown keeps economic expansion on track. Thursday's data showed that driven by consumer spending, the economic growth rate in the second quarter exceeded initial expectations. Corporate profits also rebounded in the previous quarter, which helps to further alleviate concerns about economic recession.

Christopher Rupkey, Chief Economist of FWDBONDS, said, "The concept of an economic soft landing has not changed yet." Corporate profits also rebounded in the second quarter, which means that companies are unlikely to take any cost cutting measures to tighten their belts and adjust their employee numbers. "

As of the week ending August 24th, the number of first-time applicants for state unemployment benefits decreased by 2000, adjusted for seasonal factors, to 231000. Economists previously predicted that the number of applicants in the past week would be 232000. With the distortion caused by the temporary shutdown of car factories to adjust equipment for producing new car models and the gradual weakening of the impact of Hurricane Berrier, the number of people applying for unemployment benefits has fallen from the 11 month high reached in late July.

The data revision released by the US Bureau of Statistics last week showed that the average monthly job growth for the 12 months ending in March was 68000 lower than the initial estimate. But most economists believe that this so-called indicator correction estimate is misleading.

The estimated values of the indicators are based on data from the "Quarterly Census of Employment and Wages", which comes from reports submitted by employers to state unemployment insurance plans. This data does not include undocumented immigrants, and economists believe that undocumented immigrants were one of the reasons for the strong job growth last year.

Morgan Stanley economists wrote in a report, "The downward revision of the Bureau of Statistics' revised data may be too large, as the revision is based on administrative data from unemployment insurance records, which may not capture many job positions filled by undocumented workers

The financial market expects that the Federal Reserve will begin its easing cycle next month, lowering the benchmark overnight interest rate by 25 basis points. A 50 basis point reduction is also under consideration. For over a year, the Federal Reserve has maintained its policy rate target range at the current 5.25% -5.50%, following a cumulative increase of 525 basis points in 2022 and 2023.

The second estimate of gross domestic product (GDP) for the second quarter released by the Bureau of Economic Analysis of the US Department of Commerce on Thursday showed that the year-on-year GDP growth rate for the previous quarter was revised up to 3.0%, compared to 2.8%. The economic growth rate for the first quarter was 1.4%.

The growth rate of consumer spending, which accounts for more than two-thirds of the total economy, has been revised upwards to 2.9%, up from the previous value of 2.3%, partly driven by wages. This offset the downgrading of corporate investments (mainly software). Export and private inventory investment have also been downgraded.

PNC Financial Chief Economist Gus Faucher said, "Economic growth will slow down in the near future, but there will be no recession

The Dow Jones Industrial Average of the US stock market hit a new closing record high on Thursday, boosting the morale of oil bulls

LPL Financial Chief Economist Jeffrey Roach said, "The downward adjustment in inflation accompanied by an upward adjustment in spending provides evidence for an economic soft landing

The Dow Jones Industrial Average rose 0.59% to 41335.05 points on Thursday, setting a record closing high. The S&P 500 index closed at 5591.96 points, basically unchanged, and currently slightly lower than the closing record high set in July.

In addition, the relatively tense geopolitical situation also provides support for oil prices.. Despite the uncertain future of the ceasefire agreement, Israel has been launching attacks and military operations in the Gaza Strip and the West Bank in recent days.

On August 29th local time, the Russian Ministry of Defense announced that the Russian military has taken control of two settlements, Nikolaevka in Donetsk region and Sjelymakhov in Luhansk region, striking Ukrainian military electronic warfare base stations, British cruise missile warehouses, fuel depots, and other targets. The Russian air defense system intercepted targets such as Ukrainian air bombs, rockets, and drones.

In addition, on the 29th, the Russian army repelled the Ukrainian army's attack in the Kursk region, destroying the Ukrainian multiple rocket launcher system and multiple armored vehicles. On the same day, the General Staff of the Ukrainian Armed Forces reported that as of the afternoon of the 29th, the Ukrainian army continued to engage in fierce battles with the Russian army in multiple directions and was taking necessary measures to contain the Russian offensive.

This trading day requires attention to the US July PCE data, changes in US crude oil drilling data, and geopolitical situation related news.

Continuous daily chart of US crude oil