U.S. crude oil futures rebounded to settle higher Thursday, after reaching a seven-month low yesterday. Oil prices were helped by some encouraging economic data from the U.S. and commodity prices, while ignoring a firm dollar. Crude prices plunged over 2 percent to its lowest since October yesterday, amid a strong dollar and increasing concerns over the eurozone debt crisis.
Light Sweet Crude Oil futures for July delivery, gained $0.76 or 0.9 percent to close at $90.66 a barrel on the New York Mercantile Exchange Thursday.
Crude prices scaled a high of $91.52 a barrel intraday and a low of $89.81.
Crude stockpiles rose for a ninth straight week, with an Energy Information Administration report yesterday indicating U.S. crude oil inventories to have moved up 0.90 million barrels, while gasoline stocks dipping 3.30 million barrels in the weekended May 18. Analysts expected crude oil inventories to rise by 500,000 barrels, with gasoline stocks to drop 700,000 barrels.
Earlier this morning, the U.S. dollar hovered around a two-year high versus the euro and around a two-month high against sterling. The buck, however, moved lower against the yen, while trading flat against the Swiss franc.
The dollar index, which tracks the U.S. unit against six major currencies, was trading higher at 82.129 on Thursday, from 82.073 in North American trade late Wednesday. The dollar scaled a high of 82.36 intraday and a low of 81.84.
The euro traded lower against the dollar at $1.2553 on Thursday, as compared to $1.2582 late Wednesday. The euro scaled a high of $1.2620 intraday and a low of 1.2516.
In economic news, the U.S Labor Department said new unemployment claims for the week ended May 19 came in at a seasonally adjusted level of 370,000, a slight decline from the previous week's revised level of 372,000. The previous week had initially showed new unemployment claims holding level at 370,000 from the week before. Nevertheless, economists anticipated a slight increase to 371,000.
A U.S. Commerce Department report showed durable goods orders edged up by 0.2 percent in April after tumbling by 3.7 percent in March. The steep drop reported for March reflected a revision from the 4.2 percent decrease reported previously. Excluding a 2.1 percent increase in orders for transportation equipment, durable goods orders fell by 0.6 percent in April compared to a 0.8 percent decrease in March.
From the eurozone, the German economy expanded 0.5 percent quarter-on-quarter in the first quarter as per a Federal Statistical Office report. Gross domestic product rose 0.5 percent from the prior quarter, when it fell 0.2 percent. Positive contributions came mainly from exports.
A report from the Markit Economics showed that eurozone private sector activity downturn worsened to a three-year low in May after the economy narrowly escaped a recession in the first quarter. The growth-engine of the 17-nation bloc Germany also returned to a negative zone. Intensifying the downturn, France's private sector shrunk at its fastest since April 2009. In the rest of the eurozone, the pace of contraction remained severe.
Elsewhere in Europe, the U.K. economy slipped into a double-dip recession at a faster than estimated pace during the first quarter due to a sharp revision to construction. U.K. GDP shrunk 0.3 percent from a quarter ago, slightly bigger than the previously estimated drop of 0.2 percent, second estimates published by the Office for National Statistics revealed Thursday.
by RTT Staff Writer
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