Forexpros – Crude oil futures hit a fresh nine-month high on Thursday, adding to gains after a report showed that U.S. jobless claims held steady near the lowest level since March 2008 last week while traders awaited key U.S. supply data.
On the New York Mercantile Exchange, light sweet crude futures for delivery in April traded at USD106.66 a barrel during early U.S. morning trade, gaining 0.35%.
It earlier rose by as much as 0.5% to trade at USD106.80 a barrel, the highest since May 5, 2011.
The U.S. Department of Labor said earlier that the number of individuals filing for initial jobless benefits in the week ending February 18 held steady at 351,000, confounding expectations for an increase of 3,000 to 354,000.
Jobless claims have remained below 400,000, a level historically associated with an improving labor market, in 15 of the past 17 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.
Also supporting prices, German research institute Ifo said its Business Climate Index rose to a seven-month high of 109.6 in February from a reading of 108.3 the previous month, surpassing expectations for an increase to 108.8.
The data fuelled hopes that the euro zone’s largest economy was weathering the impact of the debt crisis in the region and may avoid slipping into a recession.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.36% to trade at 79.02.
Meanwhile, markets continued to monitor tensions between Tehran and Western powers. Iran’s military started a four-day air defense exercise in a 190,000 square kilometer area in southern Iran to protect nuclear sites threatened by possible Israeli attacks on Wednesday.
Israel and the U.S. have previously stated that all options are on the table in ensuring the Islamic Republic does not acquire atomic weapons.
Oil traders were awaiting the U.S. Energy Information Administration’s closely-watched weekly report on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The report was expected to show that U.S. crude oil stockpiles rose by 1.0 million barrels last week, while gasoline supplies were forecast to decrease by 0.3 million barrels.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 3.6 million barrels last week, while gasoline stockpiles advanced 0.31 million barrels.
This week’s U.S. EIA report comes out a day later than usual because the government and financial markets were closed for the Presidents’ Day holiday.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for April delivery rallied 1.15% to trade at a nine-month high of USD124.28 a barrel, with the spread between the Brent and crude contracts standing at USD17.62.
Wall Street lender Citigroup said that Brent prices are expected to rise in the near term to USD127 a barrel, a level last seen in July 2008, while New York-traded crude was forecast to hit USD115 a barrel for the first time since September 2008.
“A retest of the all-time high at USD147.50 a barrel for Brent now looks to be the danger,” the bank said.
Brent futures have rallied nearly 9% since the start of 2012 as geopolitical and production issues in Iran, the North Sea, South Sudan, Syria and Yemen tightened supplies.
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