An upward revision in the growth of the U.S. economy was enough to erase two straight days of heavy losses for crude oil prices following the Brexit. File photo by John Angelillo/UPI | License Photo
NEW YORK, June 28 (UPI) -- A revision upward for growth in the U.S. economy was enough Tuesday to erase two straight days of heavy losses in crude oil prices sparked by the Brexit.
The U.S. economy showed signs of resilience in the first quarter, with the Commerce Department revising its growth estimate from 0.8 percent to 1.1 percent.
"The increase in real gross domestic in the first quarter reflected positive contributions from personal consumption expenditures, residential fixed investment, state and local government spending, and exports that were partly offset by negative contributions from nonresidential fixed investment, private inventory investment, and federal government spending," the Commerce Department said.
The upward revision for the U.S. economy comes as investors look for safe haven after last week's British vote to leave the European Union left the United Kingdom without its pristine AAA credit rating.
Crude oil prices, along with global stock markets, saw two straight days of heavy losses after the so-called Brexit vote, though some solid footing emerged after Asian markets closed Tuesday. Japan's Nikkei index ended the day Tuesday with a gain of 0.09 percent.
The Nikkei in Japan closed down more than 7 percent in Friday trading, leading the massive sell-off triggered by the British vote
The price for Brent crude oil was up 2.7 percent to start the day at $48.42 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, was up 2.9 percent at the start of trading in New York to $47.68 per barrel.
The recovery for crude oil prices comes as economic leaders meet in Portugal to review coordinated monetary policies in the globalized world. European leaders last week called on the British government to expedite the exit process to stave off widespread market instability.
Speaking from Portugal, European Central Bank President Mario Draghi made no mention of the British referendum, but warned "spillovers" could have a destabilizing impact when monetary policies are out of alignment.
"We may not need formal coordination of policies," he said. "But we can benefit from alignment of policies."