US Crude Boosted by Weak Dollar; Brent Sags
U.S. crude rose on Thursday by about a dollar a barrel on jobless claims falling unexpectedly in the United States and a weaker dollar, while Brent prices dropped slightly after a North Sea pipeline restarted following a shutdown.
The drop in last week's initial claims for U.S. unemployment benefits stoked optimism about the pace of a recovery in the world's largest economy.
The euro firmed after the European Central Bank left its benchmark interest rate unchanged and a successful Spanish debt auction eased some investor concern about the euro zone. The dollar index weakened by 0.4 percent. A weaker greenback can boost demand for dollar-denominated commodities like oil.
"U.S. jobless claims data and the ECB's move are helping U.S. oil futures to rebound from a 2-month low earlier this week," said Gene McGillian at Tradition Energy in Connecticut. He said Brent was weaker on the pipeline restart.
The 80,000 barrel-per-day North Sea Brent pipeline system shut on Saturday, the second Brent pipeline outage in two months. Production of North Sea Forties crude was also seen rising, with some 400,000 bpd set to load in April, up from 368,000 bpd in March, according to loading programs.
Brent crude futures for April delivery fell 16 cents to $110.90 per barrel, while U.S. West Texas Intermediate crude rose by 99 cents a barrel to $91.42, driving Brent's premium to WTI down to $19.36, from $20.63 per barrel on Wednesday.
Crude futures had fallen on Wednesday after a U.S. government report showed that domestic crude inventories rose by 3.83 million barrels last week, much more than the 500,000-barrel increase expected in a Reuters poll of analysts.
Market participants awaited February trade data from China scheduled for release on Friday, including crude demand numbers, and the U.S. February non-farm payrolls report that will follow at 8:30 a.m. Eastern.