September WTI oil priceshave spiked over $3 a barrel to nearly $91 a barrel, gaining over 4 percent in the biggest one-day surge for oil prices since July 3. Meanwhile, September Brent crude prices have rallied to their highest price since May, nearing $109 a barrel.
Oil prices are extending gains on better-than-expected U.S. non-farm payrolls data, a re-evaluation of Draghi's comments, and deepening concerns about escalating violence in Syria.
Oil prices spiked as traders initially focused on the headline figure — a 163,000 increase in jobs — in the latest U.S. non-farm payrolls report, a positive sign for the U.S. economic recovery. "The number was above consensus and that's seen as bullish," says M3 Capital founder John Netto. "The markets have also digested (ECB President Mario) Draghi's comments over the last 24 hours."
Some market participants are now encouraged by Draghi's comments on Thursday. Parsing his statement, they "have apparently decided the plan for direct purchases of Italian and Spanish debt provides a foundation for an eventual way out of the debt maze," says Addison Armstrong, senior director of market research at Tradition Energy.
"When you think about what he's doing, it's a process," Netto says. "Draghi has big consensus working with him.. and the markets trust him."
Traders say profit-taking in the Brent-WTI spread - which widened to an 11-month high of $18.90 a barrel earlier this morning - may also be contributing to the gains in WTI outpacing Brent.
Follow Sharon on Twitter: @sharon_epperson