U.S. crude-oil futures prices were higher Thursday, trading near $91 a barrel on hopes that an improving jobs picture will boost oil demand.
Traders shook off concerns over a huge jump in U.S. weekly crude oil inventories, that were reported Wednesday to have climbed to their highest level for this time of year in more than 80 years. The federal Energy Information Administration said crude-oil stocks climbed 3.8 million barrels to 381.4 million barrels in the week ended March 1, well above the 500,000-barrel increase analysts expected. That rise came as refiners cut crude oil runs by almost 500,000 barrels a day to their lowest level in about two years.
But traders said the refining slowdown will be temporary as facilities conclude seasonal maintenance workovers and crude-oil demand rises again. Motiva Enterprises LLC said Wednesday its oil refinery in Port Arthur, Texas, which has a daily processing capacity of 600,000 barrels of crude oil a day, is now fully operational and running at planned rates.
Analysts said the market's focus has shifted to economic indicators, especially signs of improvement in U.S. employment.
"The key is jobs," said Carl Larry, analyst at Oil Outlooks and Opinions. "We're looking for the economy to improve, and that translates to jobs growth and higher demand for oil."
The Labor Department reported U.S. weekly jobless claims declined by 7,000 last week, to 340,000 new claims, below economists' expectations of 350,000 claims. That report followed Wednesday's news that private businesses added 198,000 new employees in February, more than the 175,000 economists had expected, according to payroll processor Automatic Data Processing Inc. said.
Mr. Larry said the reports raise hopes for a strong February U.S. nonfarm payroll report on Friday.
Light, sweet crude oil for April delivery on the New York Mercantile Exchange was 85 cents higher, at $91.28 a barrel, after reaching a high of $91.38. Prices last settled above $91 a week ago. Traders said the seeds for a rally were planted when the contract failed to settle below $90 a barrel on Wednesday after trading below that level for much of the day.
ICE North Sea Brent crude oil for April was 25 cents lower, at $110.81 a barrel, held back by news of improving supplies as supply resumed from the Buzzard oil field and a key pipeline returned to service.
April-delivery reformulated gasoline blendstock futures were 1.34 cent lower, at $3.1113 a gallon. April heating oil was 0.52 cent lower, at $2.9704 a gallon.
Copyright (c) 2012 Dow Jones & Company, Inc.
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