U.S. crude oil futures rallied to close higher Thursday, as global equity markets continued to advance and some leading comments from senior Fed officials raised hopes of further monetary stimulus for the economy. Oil prices were supported by a weak dollar that pared early gains, following the Fed observations, to trade lower against a basket of major currencies.
The possibilitiy of further stimulus to the economy came with comments from the New York Federal Reserve Bank chief William Dudley that the U.S. economy was not strong enough to make a significant dent in unemployment. His comments followed Fed Reserves Vice Chair Janet Yellen's reading yesterday for maintaining low interest rates for some time to come. Yellen observed the economy would grow only gradually with unemployment rate continuing to remain high for years.
Light Sweet Crude Oil futures for May delivery, gained $0.94 or 0.9 percent to close at $103.64 a barrel on the New York Mercantile Exchange Thursday.
Crude prices scaled a high of $104.24 a barrel intraday and a low of $102.39.
Yesterday, oil ended higher on a weak dollar and a rebound in U.S. and global equity markets.
Earlier today, the International Energy Agency in its monthly Oil Market Report, maintained its 2012 oil demand growth forecast at 0.8 million barrels per day (mbd) to 89.90 mbd.
Meanwhile, the OPEC Oil Market Report showed world oil demand growth in 2012 would remain at 0.9 mbd, noting improving consumption in Japan could positively impact world oil demand growth.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.36 on Thursday, down from 79.74 in North American trade late Wednesday. The dollar scaled a high of 79.77 intraday, with a low of 79.34.
The euro was trading higher against the dollar at $1.3207 on Thursday, as compared to $1.3109 late Wednesday. The euro had scaled a high of $1.3208 intraday with a low of $1.3104.
In economic news, a U.S. Labor Department report showed initial jobless claims rose to 380,000 from the previous week's revised figure of 367,000. Economists expected jobless claims to edge up to 359,000 from the 357,000 originally reported for the previous week.
A separate report from the US Commerce Department showed U.S. exports ticking up slightly and imports falling, indicating a trade deficit to $46 billion, down from the $52.5 billion posted in January. Analysts expected the deficit to shrink somewhat from January levels, but the consensus was a much higher deficit of about $51.7 billion.
In the euro area, industrial production increased unexpectedly in February, helped mostly by a marked increase in energy production, as per the Eurostat. Industrial production moved up 0.5 percent on a monthly basis in February, after remaining flat in the previous month. Economists expected a 0.2 percent decrease. Production in the 27-member European Union edged up 0.2 percent month-on-month during the period.
by RTT Staff Writer
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