Oil Rises for First Time in Seven Days on Jobless Claims
Oil rose for the first time in seven days as U.S. claims for initial jobless benefits fell last week to a one-month low, adding to optimism that demand in the world’s biggest crude consumer will grow.
Futures increased 0.3 percent after the Labor Department reported jobless claims dropped by 1,000 to 367,000 in the period ended May 5, the lowest since the end of March. The number of people on unemployment benefit rolls was the smallest since July 2008.
“The jobs data was supportive and oil gained after the numbers,” said Tom Bentz, a director with BNP Paribas Prime Brokerage Inc. “The market is consolidating after the recent losses, recovering a little bit.”
Crude for June delivery gained 27 cents to settle at $97.08 a barrel on the New York Mercantile Exchange. The price, which slumped 8.8 percent in the six-day losing streak, has fallen 7.4 percent in May.
Brent oil for June settlement slid 47 cents, or 0.4 percent, to $112.73 a barrel on the London-based ICE Futures Europe exchange.
The latest week’s jobless figure compares with an average of 373,000 claims since the end of February. The median forecast of 47 economists surveyed by Bloomberg was 368,000. The four- week moving average, a less volatile measure than the weekly figures, decreased to 379,000 last week from 384,250 the previous period.
“The jobs number is alleviating concerns that the economic recovery is faltering,” said Phil Flynn, an analyst at futures brokerage PFGBest in Chicago. “The market’s been down for six days in a row so any good news will encourage more buying.”
Oil also gained as U.S. equities advanced and the euro strengthened against the dollar. The Standard & Poor’s 500 Index rebounded from a two-month low, rising 0.6 percent as floor trading ended on the Nymex.
The euro snapped the longest slide since 2008 as Greece attempted to form a new government. The euro gained 0.2 percent to $1.2956. A weaker dollar and stronger euro increase oil’s appeal as an alternative investment.
“The jobless claims were pretty good,” said Rich Ilczyszyn, chief market strategist and founder of Iitrader.com in Chicago. “Equities like it and the euro isn’t falling into the ocean. You are seeing buyers coming back into the market.”
Oil declined earlier after China’s April crude imports dropped to the lowest level since December, while exports of goods rose less than estimated, signaling less demand in the world’s second-biggest crude consumer.
China bought 22.21 million metric tons, or 5.4 million barrels a day, more oil than it exported in April, data published on the website of the Beijing-based General Administration of Customs showed. Imports of crude were 22.26 million tons and exports 50,000.
The Organization of Petroleum Exporting Countries said that global supplies are outpacing demand, keeping its forecast for world consumption this year unchanged.
OPEC, scheduled to meet next month, is producing 8.3 percent more crude than it considers necessary this quarter, which has helped inventories in developed nations to reach “comfortable levels,” equivalent to about 59 days worth of consumption, according to an e-mailed report from the group.
Saudi Arabia, the world’s biggest crude exporter, pumped 10.1 million barrels a day in April, about 200,000 barrels more than the previous month.
U.S. oil stockpiles climbed 3.65 million barrels to 379.5 million last week, the most since August 1990, the Energy Department reported yesterday. Total demand rose 0.3 percent to 18.6 million barrels a day.
Electronic trading volume on the Nymex was 477,877 contracts as of 3:09 p.m. in New York. Volume totaled 660,026 contracts yesterday, 8.6 percent above the three-month average. Open interest was 1.57 million.
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