West Texas Intermediate crude advanced for a third day as applications for U.S. unemployment benefits fell for the first time in three weeks.
Prices climbed as much as 1.5 percent. Jobless claims dropped by 20,000 to 331,000 in the period ended Feb. 1, the Labor Department reported. WTI also followed gains in other commodities as the euro strengthened against the dollar. European Central Bank President Mario Draghi reiterated today that the bank will take action to boost the economy.
“The jobless claims got the ball rolling,” said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC. “The ECB is a big factor. It’s a combination of the jobless number and the euro.”
WTI for March delivery rose 93 cents, or 1 percent, to $98.31 a barrel at 10:45 a.m. on the New York Mercantile Exchange. The volume of all futures traded was 13 percent more than the 100-day average.
Brent for March settlement gained 68 cents, or 0.6 percent, to $106.93 a barrel on the London-based ICE Futures Europe exchange. Volume of all futures traded was 9.1 percent above the 100-day average.The European crude was at a premium of $8.62 to WTI on the ICE exchange. The spread closed at $8.87 yesterday.
Last week’s jobless claims were smaller than the forecast of 335,000 in a Bloomberg survey.
Monthly figures for January, which will be released by the Labor Department tomorrow, are projected to show a 180,000 increase in payrolls, according to separate survey. The unemployment rate probably held at 6.7 percent, the lowest level since October 2008.
U.S., the world’s biggest oil-consuming country, will use 18.9 million barrels a day this year, according to the Energy Information Administration.
“The weekly jobless number is good, and it’s a positive sign for the oil market,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “We are focused on the ECB and what it’s going to do. There seems to be some momentum across the commodity complex.”
Draghi signaled that ECB officials will wait until next month before deciding whether to cut interest ratesfurther. The central bank left them unchanged today.
The ECB remains “firmly determined to maintain the high degree of monetary accommodation and to take further decisive action if required,” Draghi said at a press conference today in Frankfurt.
The euro rose as much as 0.6 percent to $1.3619 per euro. A stronger euro and weaker dollar boost commodities’ investment appeal.
The Standard & Poor’s GSCI Index, a gauge of 24 commodities, increased as much as 1 percent. U.S. stocks advanced, with the S&P 500 Index up as much as 1.1 percent.
“The euro is strong and the equities are helping,” said Bill Baruch, a senior market strategist at Iitrader.com in Chicago. “The economy is getting better.”
WTI also advanced as stockpiles of distillate fuel dropped for a fourth week because of frigid temperatures in the U.S.
“Product demand is very strong because of the cold weather,” Flynn said. “The drop in distillate is supportive for the market.”
Supplies of distillate, a category that includes heating oil and diesel, fell 2.36 million barrels to 113.8 million last week, the EIA, the Energy Department’s statistical arm, said yesterday.
Distillate demand averaged over the last four weeks rose 6.1 percent to 3.99 million barrels a day, the highest level since November, according to the EIA.
Ultra low sulfur diesel futures for March delivery, a proxy for heating oil, gained 0.11 cent to $2.9979 a gallon on the Nymex. Volume of all futures traded was 4.6 percent above the 100-day average.