Oil futures rose Thursday for the fourth straight session, as U.S. economic data and statements from Federal Reserve officials on monetary policy pushed broader markets higher.
Light, sweet crude for August delivery settled higher by $1.55, or 1.6%, at $97.05 a barrel on the New York Mercantile Exchange. ICE North Sea Brent crude oil for August delivery settled $1.16 higher at $102.82 a barrel.
Analysts said Fed officials' comments that sought to calm investor's worries, combined with U.S. economic data and the weaker dollar, drove crude's rally. Fed officials said it was unlikely that monetary policy would be tightened too quickly. William Dudley, president of the Federal Reserve Bank of New York, said that a rise in short-term interest rates "is very likely to be a long way off."
Early in the session, data from the Commerce Department showed initial claims for unemployment benefits decreased by 9,000 to a seasonally adjusted 346,000 last week, meeting economist's expectations. Personal spending rose in line with forecasts and personal incomes rose 0.5% in May, a bigger rise than economists expected.
The Dow Jones Industrial Average was recently 0.8% higher at 15,032.
"The market has been undoing the wall of worry created by the Fed meeting last week," Matt Smith, commodity analyst at energy-consulting firm Schneider Electric.
Investors have grown nervous about the central bank's plans after Fed Chairman Ben Bernanke said last week that the central bank could pull back on its $85-billion-per-month bond-purchase program later this year and end it completely by mid-2014, if economic growth panned out as forecast.
But although economic data showed modest improvements in the U.S. economy, analysts said it was not enough to prompt the Fed to quickly dial back its stimulus programs.
"While the economic data was good, the numbers were not blockbusters," said Phil Flynn, chief energy analyst at Price Futures Group.
The Fed's bond-purchase program has so far boosted economic growth in the U.S., the world's largest consumer of oil. Traders have been worried that tapering of these stimulus efforts too early could hurt oil demand.
Meanwhile, a weaker U.S. dollar also boosted oil prices. A weaker dollar makes the dollar-denominated oil cheaper for buyers who hold other currencies. The ICE dollar index, the measure of the dollar against a basket of currencies, was recently 0.1% lower compared to Wednesday.
Oil prices also received some support from revised EIA data for April. Gasoline use in April was revised down 0.6% from a year earlier compared to earlier indications of demand being down 3.6% in the period. Demand for distillates, comprising heating oil and diesel, was revised up 4.5% in April compared to a year earlier. Earlier indications showed distillate use was down 1.1% from a year earlier.
Front-month July reformulated gasoline blendstock, or RBOB, settled 1.20 cents higher at $ 2.7426 a gallon. July heating oil settled 3.51 cents higher at $2.8894 a gallon.
Copyright (c) 2012 Dow Jones & Company, Inc.
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