Forexpros – Crude oil futures added to gains on Thursday, after data showed that U.S. initial jobless claims held steady near the lowest level since March 2008 last week, easing concerns over the U.S. economic outlook.
On the New York Mercantile Exchange, light sweet crude futures for delivery in April traded at USD107.72 a barrel during early U.S. morning trade, adding 0.61%.
It earlier rose by as much as 0.7% to trade at a two-day high of USD107.81 a barrel.
The U.S. Department of Labor said earlier that initial claims for state unemployment benefits fell by 2,000 to 351,000 last week. The previous week’s figure was revised up to 353,000 from the previously reported 351,000.
Jobless claims have remained below 400,000, a level historically associated with an improving labor market, in 16 of the past 18 weeks.
Separate reports showed that the U.S. personal spending rose 0.2% in January, below expectations for a 0.4% gain, while Personal income rose by 0.3% last month, missing expectations for a 0.6% gain.
The data came one day after Federal Reserve Chairman Ben Bernanke dampened expectations for a third round of monetary easing in testimony before Congress, after he acknowledged the recent improvement in the labor market and said that higher oil prices could push up inflation.
The U.S. is the world’s largest oil consumer, accounting for nearly 21% of global demand.
Meanwhile, oil traders continued to monitor developments surrounding a potential disruption to Iranian oil supplies. Growing tensions between Iran and Israel also remain in focus.
U.S. Air Force Chief of Staff General Norton Schwartz said Wednesday that Washington has prepared military options to strike Iran’s nuclear sites should conflict erupt.
According to a report in Bloomberg, some of the preparations include providing aerial refueling for Israel Air Force planes and attacking the Islamic Revolutionary Guard Corps, Iranian military bases, and the Ministry of Intelligence and Security.
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.
There are fears that an escalation of hostilities between Israel and Iran could set off a conflict across the region and send oil prices skyrocketing.
Global financial service provider Barclays said in a report Wednesday that NYMEX-traded oil prices could average USD135 a barrel in 2012 if international relations with Iran deteriorate, compared with a current forecast of USD115.
“We still contend that the risk of either an Israeli or a U.S. strike on the Iranian nuclear facilities is low, but it has risen, in our view, from 5%-10% last year to 25%-30% now,” the bank said in a report.
Iran produces about 3.5 million barrels of oil a day, making it the second largest oil producer in the Organization of Petroleum Exporting Countries, after Saudi Arabia.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for April delivery rose 0.76% to trade at USD123.59 a barrel, with the spread between the Brent and crude contracts standing at USD15.87.
Barclays said Brent oil could rise to USD150 a barrel, even if there is no military conflict or closure of the Strait of Hormuz.
“Quarterly averages of USD140 per barrel or USD150 per barrel are distinctly possible” in the third and fourth quarters of 2012. This is not our current base case, though it does seem to be moving closer to becoming reality.”
Brent futures have rallied in recent weeks, as geopolitical and production issues in Iran, the North Sea, South Sudan, Syria and Yemen tightened supplies.
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