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Oil prices up on jobless and crude supply reports

Oil prices up on jobless and crude supply reports

Oil prices rose again Thursday, to around $75 a barrel, after the government said U.S. jobless claims fell and crude inventories shrank more than expected.
Benchmark oil for October delivery added 26 cents to $74.93 a barrel in midday trading on the New York Mercantile Exchange. Crude rose 58 cents to settle at $74.67 on Wednesday.
The Labor Department said new claims for unemployment benefits dropped by 27,000 last week, more than economists expected. That helped push stock prices up. The Dow Jones Industrial Average was up about 70 points at midday. The Nasdaq and the S&P 500 were higher as well. Energy traders have been watching the direction of the stock market for signs of confidence in the economy, which could increase oil and gas demand.
The Energy Department's Energy Information Administration said crude inventories fell by 1.9 million barrels last week from the week before. Analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., expected a drop of 730,000 barrels. Supplies of gasoline and distillates fell as well.
Despite last week's decline, U.S. oil supplies are at a 30-year high and that weighs on prices, energy consultancy Cameron Hanover said.
"Truth be told, nothing would be better for American economic recovery than genuinely cheap oil," Cameron Hanover said in its daily report to investors. "We have never had a strong economic recovery without cheap oil _ nor have we ever had cheap oil without dramatic U.S. growth."
In its monthly outlook, the Energy Department said Wednesday it expects oil to be around $78 a barrel by December and at $84 next year, as strong demand from China helps offset slowing growth in developed countries. China will likely consume an average of 9.5 million barrels a day next year, up 46 percent from 2002, the department said.
"It seems all the eggs are being placed in the emerging markets," said the Schork Report, edited by energy trader and consultant Stephen Schork. "Given the tendency for bubbles and crashes in that region, we would remain very cautious."
Oil prices could get some support from another hurricane brewing in the Atlantic. Forecasters say Tropical Storm Igor will probably grow into a hurricane soon. "Threat to the Gulf and oil operations (is) too early to tell but stay tuned!" said energy analyst Phil Flynn.
Natural gas prices continued to sink after the Energy Department said supplies expanded again last week, by 58 billion cubic feet. The amount of gas in storage is now 5.5 percent above the five-year average. Natural gas for October delivery fell 8.6 cents to $3.728 per 1,000 cubic feet on the Nymex.
In other trading in October contracts, heating oil rose 0.53 cent to $2.0870 a gallon and gasoline gained 1.06 cents to $1.9498 a gallon.
In London, Brent crude was down 2 cents at $78.15 on the ICE Futures exchange.


Updated : 2021-08-04 21:46 GMT+08:00