Oil Rockets Past $78 on Recovery Hopes, Weaker Dollar

Soaring above $78 on the New York Mercantile Exchange on Thursday, crude oil bounced back into the high end of  its trading range, the price per barrel further lifted by rising equities, a weakened greenback and bullish momentum continuing to build off of yesterday's EIA's inventory report showing a steep drop in oil and products stockpiles.

After the previous front-month contract booked consecutive losses that saw oil prices hit near $65, the price of light, sweet crude oil for February delivery broke new ground on Dec. 24, ultimately closing at $78.05 a barrel on the NYMEX ahead of a holiday weekend. Additionally, natural gas spot prices at the Henry Hub posted a slight loss today, settling down to $5.643 per thousand cubic feet, yet still standing tall in the upside of its current trading range.

On Christmas Eve, Wall Street's optimism was buoyed by government data showing a decrease in initial jobless claims on the domestic front, as well as growth in durable goods orders, both of which point to a budding economic recovery and improvements in the nation's fiscal health entering the new year. 

Specifically, new applications for jobless benefits dropped in the week to Dec. 18 to the lowest level in more than 15 months, according to Thompson Reuters.  

"No doubt there was continued bullish momentum after yesterday's inventory data. Bullish technical action, although there was light trading volume. Equities strength and a weaker dollar helped to support also," Tom Bentz, an analyst at BNP Paribas Commodity Futures Inc in New York, was quoted as saying in an analysis by Reuters.

Helping to spark additional purchasing enthusiasm for dollar-denominated commodities, the U.S. currency lost ground against the euro today, extending its losses for the week despite a recent rally in the greenback's value and safe-haven appeal.