Nymex Crude Rallies to 3-Week High as Equities Climb
Crude-oil futures settled at a three-week high Thursday in a late-session rally, amid a rally in the equity market and encouraging data on the U.S. economy.
Light, sweet crude for July delivery settled 81 cents, or 0.8%, higher at $96.69 a barrel on the New York Mercantile Exchange, the highest settlement since May 20. Brent crude on the ICE Futures Europe settled 76 cents, or 0.7%, higher at $104.25 a barrel.
Futures spent much of the day little changed, but rallied late in the session as other markets pushed to intraday highs. Craig Turner, commodity futures broker at Daniels Trading, said oil pushed higher with equities, with the Standard & Poor's 500 Index recently gaining 1.2% to 1,632.
Meanwhile, the Japanese yen touched a two-month high against the dollar early Thursday. A weaker dollar typically lifts the price of crude by making the dollar-denominated commodity cheaper for holders of other currencies.
Traders were also encouraged by positive economic news out of the U.S., the world's biggest oil consumer. The Labor Department said initial claims for jobless benefits fell by 12,000 to 334,000 for the week ended Saturday. The number of new claims was lower than economists' estimates. The Commerce Department also reported that retail sales were up 0.6% in May on the back of higher automobile sales, compared to expectations of 0.4% growth.
The reports offer a snapshot of the state of the labor market and consumer confidence, which could reflect in greater energy use by businesses and motorists heading to work or retail stores.
Oil futures have been bobbing around $95 a barrel for much of the last two months, as traders remain uncertain about the outlook for global economic growth. Weakness in Europe and a slowdown in China has kept a lid on oil prices, while uncertainty over the fate of central-bank stimulus measures have also left traders cautious.
Other data released this week offered a less encouraging economic picture. The World Bank late Wednesday lowered global economic growth to 2.2% in 2013 from 2.4% in January. It also lowered its expectations for growth China, the second-largest oil consumer, by 0.7 percentage point to 7.7% this year.
Front-month July reformulated gasoline blendstock, or RBOB, settled 5.12 cents higher at $2.8613 a gallon. July heating oil settled 4.43 cents higher at $2.9395 a gallon.
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