Investing.com - Crude oil futures traded higher Thursday despite global growth worries on U.S. jobless claims
On the New York Mercantile Exchange, light sweet crude futures for delivery in May traded at USD103.18 a barrel during U.S. afternoon trade, surging 1.70%.
Trading volumes were expected to remain thin ahead of the Easter holiday. Markets in the U.S. and Europe will remain closed on Friday in observance of Good Friday, while most markets in Europe will remain closed next Monday as well.
Crude rallied despite Spain’s borrowing costs continued to rise following Wednesday’s poorly received government bond auction.
The yield on the country’s 10-year bond climbed to 5.84% earlier, the highest level since mid-December.
Meanwhile, concerns over the outlook for growth in the euro zone mounted following a recent string of weak economic data.
Earlier Thursday, official data showed that German industrial production dropped 1.3% in February, more than expectations for a 0.5% drop, renewing concerns over the outlook for the bloc’s largest economy.
The data came one day after European Central Bank President Mario Draghi warned that "downside risks to the economic outlook prevail" after the central bank kept its benchmark interest rate unchanged at a record low of 1%.
Euro zone developments, along with tensions surrounding Iran’s disputed nuclear program have dominated trading in the oil market for the last several months.
There are worries that the single currency bloc’s sovereign debt crisis could flare up again and trigger a broader economic slowdown that would curb demand for oil.
The euro zone accounted for nearly 16% of global oil consumption in 2010, according to data from British Petroleum.
The renewed euro zone concerns, along with lingering disappointment from diminished expectations for a third round of monetary easing in the U.S., prompted investors to shun riskier assets and flock to the relative safety of the U.S. dollar.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.48% to trade at 80.29, the highest since March 16.
Meanwhile, a massive build in U.S. oil supplies last week is forcing traders to refocus on the supply and demand picture after tensions with Iran drove market action in recent months.
The U.S. Energy Department said in its weekly report that crude oil inventories surged by 9.0 million barrels last week, the biggest supply gain since 2008.
Total U.S. crude oil inventories stood at 362.4 million barrels as of last week, the highest since May 2011, underscoring fears over a slowdown in oil demand from the U.S.
Crude prices remained supported after a report from the U.S. Department of Labor showed that jobless claims fell by 6,000 to 357,000 last week, the lowest level since April 2008.
Attention now shifts to Friday’s U.S. non-farm payrolls data, which could shed further light on the strength of the U.S. economy and the need for further monetary easing in the U.S.
Oil traders have long been taking cues from the monthly jobs report, the most-closely followed indicator of U.S. employment.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand. Investors often use manufacturing numbers as indicators for future fuel demand growth.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for May delivery soared 0.94% to trade at 123.47 a barrel, with the spread between the Brent and crude contracts standing at USD20.29.