Crude oil rallies to 3-week high after strong U.S. jobs data

Published 07/07/2011, 09:27 AM
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Investing.com – Crude oil futures extended gains on Thursday, jumping to a fresh three-week high after stronger-than-expected data on U.S. non-farm payrolls and first time jobless claims boosted optimism in the economic recovery of the world’s largest oil consumer.
 
On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at USD98.67 a barrel during European afternoon trade, surging 2.1%.       

It earlier rose as much as 2.4% to trade at USD99.05 a barrel, the highest price since June 15. 

Earlier in the day, payroll processing firm ADP said that U.S. non-farm private employment rose by 157K in June, blowing past expectations for a gain of 60K.

Employment in the service-providing sector rose by 130K in June, nearly three times faster than in May, marking 18 consecutive months of employment gains.

Separately, the U.S. Department of Labor said earlier that the number of individuals filing for initial jobless benefits in the week ending July 1 declined by 14K to a seasonally adjusted 418K, outstripping expectations for a decline to 420K.

Continuing jobless claims fell by 43K to 3.681 million, beating expectations for a decline to 3.700 million.

Meanwhile, markets were awaiting the U.S. Energy Department’s weekly report on crude oil inventories for the week ended July 1.

The data was expected to show that U.S. crude oil stockpiles declined by 2.5 million barrels, the longest streak of withdrawals since January, while gasoline supplies were forecast to rise by 0.8 million barrels.

U.S. oil supplies have declined nearly 3.8% since the end of May amid U.S. peak gasoline demand and the start of the Atlantic hurricane season.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for August delivery climbed 2.35% to trade at USD116.56 a barrel, up USD17.89 on its U.S. counterpart.

Brent’s premium to U.S. crude may widen to at least USD40 a barrel between now and the middle of 2012, according to Citigroup.

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