NEW YORK: Brent crude oil rose towards $110 a barrel yesterday, rebounding after four days of losses, after the latest indication of a labour market recovery in the United States, the world’s top oil consumer.
US data which showed the number of Americans filing new claims for unemployment benefits unexpectedly fell last week also lifted US stocks as the Dow Jones industrial average extended its recent winning streak to 10 days in a row.
A subdued outlook for oil demand growth and easing supply concerns, however, limited the gains.
Brent crude for April rose 86 cents to $109.38 by 12:46pm. EDT (1646 GMT), after trading as high as $109.98. The May Brent contract, which becomes the front-month contract on Friday, was up 44 cents. Brent has fallen for the last four sessions.
US oil rose 25 cents to $92.77. Brent’s premium to US crude widened to about $16.70 after falling on Wednesday below $16, the narrowest since Jan. 23.
“The US jobs data is helping, but it looks like a last trading day short-covering move for April Brent,” said Tony Machacek, an oil futures broker at Jefferies Bache in London.
Oil slipped earlier in the session as investors focused on a subdued outlook for demand growth in top consumers the United States and China, easing supply concerns.
“It could be related to some buying ahead of the contract expiry,” said Carsten Fritsch at Commerzbank of April Brent’s gain. “News that South Sudan plans to resume oil production in three weeks’ time is weighing on the price of Brent.”
Two of the three most closely watched oil forecasters - the International Energy Agency and U.S. government’s Energy Information Administration - lowered global oil demand growth forecasts this week. The third, OPEC, flagged downside risks to the outlook. Comments by China’s central bank on stabilizing inflation expectations reinforced concern it may drop its pro-growth policy before economic expansion gathers full momentum. The remarks pressured most markets in Asia.
South Sudan said on Tuesday it would be ready to restart oil production - shut down for more than a year - within three weeks and on Wednesday a US government report said crude stockpiles rose last week.
Opec production is expected to trend higher as Saudi Arabia adds to supplies in coming months. Saudi Arabia expects to raise its oil output in the second quarter, oil industry sources said last month.
Saudi cut back its output in the last two months of 2012 because of factors including weaker Asian demand and a lower domestic need for crude in power plants. The US dollar gave up earlier strength to trade lower against a basket of currencies. A weaker dollar can make oil cheaper for other currency holders, and support oil prices.
Britain’s top shares rose to a new five-year closing high on Thursday, led by financials, helped by further signs of strength in the US economy.
The FTSE 100 ended up 47.91 points, or 0.7 percent, at 6,529.41, its highest close since late 2007, after better than expected US weekly jobless claims data.
Some bet on more gains from the index, up almost 11 percent this year and around 6 percent shy of an all-time closing high of 6,930.20 set in December 1999, months before the dot-com bubble burst.
“Overall the trend from a technical point of view looks healthy and upwards ... I don’t think it’s beyond the realms of possibility that the FTSE could hit an all-time high some time this year,” said Angus Campbell, head of market analysis at Capital Spreads.
Financials led the risers, with good gains seen from Prudential, up 2.7 percent, as yield-hungry investors continued to snap up shares in the insurer which ramped up its dividend by a bigger-than-expected 16 percent on Wednesday.
Retailers were also in favour. Britain’s fourth-biggest grocer Wm Morrison added 1.7 percent after raising its dividend by 10 percent and announcing talks with online grocer Ocado over an online food operation.
Ocado, which has been the talk of bid rumours involving Morrisons and is one of the most shorted stocks on the FTSE indexes, also reported a strong rise in recent sales and jumped 23.7 percent, the standout midcap gainer.
Britain’s biggest household goods retailer Home Retail rose 12 percent after it hiked its profit forecast for the second time in 2013.Agencies
