Investing.com - Crude oil futures gained on Thursday, trading just below the key USD100-a-barrel-level after European Central Bank President Mario Draghi confirmed reports that Greece had finally agreed on a package of austerity measures, while better-than-expected U.S. employment data lent further support.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at USD99.89 a barrel during U.S. morning trade, climbing 1.19%.
It earlier rose by as much 1.25% to trade at USD100.00 a barrel, just below Wednesday’s one-week high of USD100.07 a barrel.
According to government sources, Greek Prime Minister Lucas Papademos declared that an agreement was reached and endorsed by the major Greek political parties on a set of new austerity measures needed in order to secure a second bailout package.
ECB President Draghi later confirmed the news at his press conference following the central bank’s policy-setting meeting, at which it kept interest rates on hold at 1%.
“I got a call from the Prime Minister of Greece that an agreement has been reached and has been endorsed by the major parties,” Draghi said.
The news came only hours before a meeting of euro zone finance ministers in Brussels to discuss the Greek EUR130 billion bailout.
The news helped lift the euro to an eight-week high against the U.S. dollar, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, declined 0.15% to trade at 78.60.
Oil prices typically strengthen when the U.S. dollar weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.
Risk appetite was also boosted by official data showing that U.S. jobless claims fell to an almost four-year low last week.
The U.S. Department of Labor said the number of individuals filing for initial jobless benefits last week fell by 15,000 to a seasonally adjusted 358,000, beating expectations for a decline to 370,000.
Jobless claims have remained below 400,000, a level historically associated with an improving labor market, in 13 of the past 15 weeks.
Oil traders have been paying close attention to readings on U.S. employment levels for signs that people are returning to work, thus driving more and using more energy.
Meanwhile, oil traders continued to monitor tensions between Iran and the West after the Islamic Republic renewed threats to shut the Strait of Hormuz in response to the latest U.S. sanctions imposed against the country.
Iran is the world's fourth largest oil producer, pumping nearly 5% of the world's oil in 2010. The threat of a major supply disruption from the country has helped support oil prices in recent weeks.
Market participants shrugged off a downward revision to global oil demand expectations from the Organization of the Petroleum Exporting Countries.
In a monthly report, OPEC cut its forecast for world oil demand growth in 2012 by 120,000 barrels per day to 940,000.
“Worries about the U.S. economy, along with the EU debt problem, are adding more uncertainty to world oil needs over the next 12 months," the report said.
Crude’s gains were limited during the Asian trading session after China’s National Bureau of Statistics said earlier that consumer price inflation rose by a seasonally adjusted 4.5% in January, accelerating from 4.1% in December.
Month-on-month, the consumer price index rose 1.5% in January from a month earlier, the largest monthly gain in four years.
The data dampened expectations China will ease monetary policy in the near-term to stimulate growth in the world’s second largest economy.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery added 0.75% to trade at a six-month high of USD118.09 a barrel, with the spread between the Brent and crude contracts standing at USD18.20 a barrel.
The spread had widened to more than USD20 per barrel on Tuesday, the highest since October.
Brent prices have outperformed crude in recent sessions amid concerns over a disruption to supplies from African producers, Nigeria and South Sudan, as well as a spell of freezing weather in Europe.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at USD99.89 a barrel during U.S. morning trade, climbing 1.19%.
It earlier rose by as much 1.25% to trade at USD100.00 a barrel, just below Wednesday’s one-week high of USD100.07 a barrel.
According to government sources, Greek Prime Minister Lucas Papademos declared that an agreement was reached and endorsed by the major Greek political parties on a set of new austerity measures needed in order to secure a second bailout package.
ECB President Draghi later confirmed the news at his press conference following the central bank’s policy-setting meeting, at which it kept interest rates on hold at 1%.
“I got a call from the Prime Minister of Greece that an agreement has been reached and has been endorsed by the major parties,” Draghi said.
The news came only hours before a meeting of euro zone finance ministers in Brussels to discuss the Greek EUR130 billion bailout.
The news helped lift the euro to an eight-week high against the U.S. dollar, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, declined 0.15% to trade at 78.60.
Oil prices typically strengthen when the U.S. dollar weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.
Risk appetite was also boosted by official data showing that U.S. jobless claims fell to an almost four-year low last week.
The U.S. Department of Labor said the number of individuals filing for initial jobless benefits last week fell by 15,000 to a seasonally adjusted 358,000, beating expectations for a decline to 370,000.
Jobless claims have remained below 400,000, a level historically associated with an improving labor market, in 13 of the past 15 weeks.
Oil traders have been paying close attention to readings on U.S. employment levels for signs that people are returning to work, thus driving more and using more energy.
Meanwhile, oil traders continued to monitor tensions between Iran and the West after the Islamic Republic renewed threats to shut the Strait of Hormuz in response to the latest U.S. sanctions imposed against the country.
Iran is the world's fourth largest oil producer, pumping nearly 5% of the world's oil in 2010. The threat of a major supply disruption from the country has helped support oil prices in recent weeks.
Market participants shrugged off a downward revision to global oil demand expectations from the Organization of the Petroleum Exporting Countries.
In a monthly report, OPEC cut its forecast for world oil demand growth in 2012 by 120,000 barrels per day to 940,000.
“Worries about the U.S. economy, along with the EU debt problem, are adding more uncertainty to world oil needs over the next 12 months," the report said.
Crude’s gains were limited during the Asian trading session after China’s National Bureau of Statistics said earlier that consumer price inflation rose by a seasonally adjusted 4.5% in January, accelerating from 4.1% in December.
Month-on-month, the consumer price index rose 1.5% in January from a month earlier, the largest monthly gain in four years.
The data dampened expectations China will ease monetary policy in the near-term to stimulate growth in the world’s second largest economy.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery added 0.75% to trade at a six-month high of USD118.09 a barrel, with the spread between the Brent and crude contracts standing at USD18.20 a barrel.
The spread had widened to more than USD20 per barrel on Tuesday, the highest since October.
Brent prices have outperformed crude in recent sessions amid concerns over a disruption to supplies from African producers, Nigeria and South Sudan, as well as a spell of freezing weather in Europe.