Crude gains as upbeat U.S. jobless claims report sparks bargain hunting

Investing.com - Investing.com - Crude prices rose on Thursday after data revealed fewer in the U.S. sought first-time unemployment assistance last week, which enticed bottom fishers who felt the commodity had fallen too far on supply concerns.

In the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in September traded up 0.32% at $97.23 a barrel during U.S. trading. New York-traded oil futures hit a session low of $96.56 a barrel and a high of $97.48 a barrel.

The September contract settled down 0.47% at $96.92 a barrel on Wednesday.

Nymex oil futures were likely to find support at $96.26 a barrel, the low from Feb. 3, and resistance at $102.10 a barrel, the high from July 28.

Upbeat news out of the U.S. labor market sent oil prices climbing on Thursday on demand from bottom fishers.

The U.S. Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending Aug. 2 fell by 14,000 to 289,000 from the previous week's total of 303,000.

Analysts had expected jobless claims to rise by 2,000 to 305,000 last week, and the numbers depicted a U.S. economy that continues to improve and will likely consume more fuel and energy going forward.

Despite upbeat U.S. trade balance, service-sector, economic growth and other data, oil prices have slumped on concerns in recent sessions that global supply continues to exceed demand.

By Thursday, investors felt supply concerns had pushed prices too low, especially after digesting a solid weekly U.S. inventory report.

The U.S. Energy Information Administration said on Wednesday that U.S. crude oil inventories declined by 1.8 million barrels in the week ended August 1, beating expectations for a decline of 1.7 million barrels.

Total U.S. crude oil inventories stood at 365.6 million barrels as of last week.

The report also showed that total motor gasoline inventories decreased by 4.4 million barrels, confounding forecasts for a gain of 0.3 million barrels, while distillate stockpiles fell by 1.8 million barrels, stronger than expectations for an increase of 0.9 million barrels.

Geopolitical factors supported oil as well.

Fears the Ukraine conflict may disrupt oil exports from Russia supported oil prices as did news the U.S. is considering launching air strikes in Iraq to halt a Sunni insurgency and airdrops of food and medicine to assist those displaced by the conflict.

Separately, on the ICE Futures Exchange in London, Brent oil futures for September delivery were up 0.66% and trading at US$105.29 a barrel, while the spread between the Brent and U.S. crude contracts stood at US$8.06 a barrel.

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Crude gains as upbeat U.S. jobless claims report sparks bargain hunting

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