April 27 (UPI) — Mixed results for first quarter U.S. economic growth balanced against a waning risk premium from Korean détente to keep oil prices in stable territory Friday.
North Korean leader Kim Jong Un crossed into South Korean territory Friday to shake hands with his counterpart from Seoul, Moon Jae-in. In a historic summit at the Peace House building on the border, both sides agreed to a path toward unification, the easing of military tensions and the possible end to war left unresolved since the 1950s.
“We are not two different nations that should fight one another but, we are the same people, of the same blood, who must unite and live peacefully,” Kim said.
The landmark handshake between the two historical adversaries suppressed a risk premium built up for the price of crude oil. That risk sent oil prices higher in January when U.S. President Donald Trump and the North Korean leader traded barbs over the size of their nuclear arsenals.
Miha Hribernik, a senior consultant on Korean affairs at Verisk Maplecroft, told UPI the meeting between the two Korean leaders was big on diplomatic symbolism, but offered little on substance. North Korea, after a series of nuclear tests, is unlikely to disarm.
“The ball is now firmly in Donald Trump’s court,” he said. “His meeting [in the coming weeks] with Kim will dictate the pace and direction of future negotiations with Pyongyang.”
The price for crude oil was inching slightly lower ahead of the opening bell in New York. The price for Brent crude oil was down 0.35 percent as of 9:15 a.m. EDT to $74.48 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 0.62 percent to $67.77 per barrel.
Prices may be influenced later in the day pending any declarations from U.S. President Trump on the Iranian nuclear deal. The president met this week with a French President Emmanuel Macron who wants the United States to stay in the deal. Trump hosts German Chancellor Angela Merkel at the White House on Friday.
On the economic front, the U.S. government offered its first estimate of growth in gross domestic product for the first quarter at 2.3 percent, better than expected. Growth was supported by stronger business investments, but offset by declines in consumer and government spending. Despite protectionist trade policies from the Trump administration, the Commerce Department reported that imports increased in the first quarter.
Real GDP increased 2.9 percent in the fourth quarter.