Crude Oil Higher; Jobless Claims, Drop in Inventories Help By

© Reuters.

By Peter Nurse — Oil prices pushed higher Thursday, boosted by solid employment data, a sharp drop in stocks and the confidence among a group of top producers that demand would grow.

By 9:10 AM ET (1310 GMT), U.S. crude futures were up 1.3% at $69.47 a barrel, while futures were up 1.2% at $72.44 a barrel. 

U.S. Gasoline RBOB Futures were up 1.5% at $2.1434 a gallon.

Data released earlier Thursday showed the number of Americans filing for jobless benefits fell 14,000 last week to 340,000, the lowest level since March 2020, while layoffs dropped to their lowest level in more than 24 years in August.

This news helped the crude market as it suggested greater economic activity and thus rising energy demand.

U.S. dropped by 7.2 million barrels last week, the Energy Information Administration said on Wednesday, with the last peak of the country’s summer driving season due this weekend.

“However, of most interest was implied demand for refined products,” said analysts at ING, in a note, which “is reported to have hit a record high of 22.8MMbbls/d over the week, eclipsing the previous record of 22.4MMbbls/d seen in 2018. This stronger implied demand number likely reflects some downstream inventory build ahead of Hurricane Ida.”

Many refiners remained offline as a result of the hurricane earlier in the week, with an estimated 1.4 million barrels a day of the region’s oil production still offline, according to the U.S. regulator.

The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, agreed on Wednesday to press ahead with their plan to add 400,000 barrels per day to the market in October, as widely expected.

The group also raised its demand forecast for 2022, indicating that the members believe that fundamentals remain strong even while acknowledging that there is still plenty of uncertainty related to Covid-19 pandemic, and the highly-transmissible delta variant, in particular.

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