Oil at 2-Week High, Biggest 1-Day Gain in a Month
U.S. oil futures topped $91 a barrelfor the first time in two weeks, surging over 4 percent to post the biggest one-day surge for oil prices since June 29. The September WTI crudecontract closed the NYMEX floor trading session up $4.27 at $91.40 a barrel.
Meanwhile, September Brent crude pricesrallied to near $109, the highest price since May 22.
Mirroring strong gains in the stock market and Euro , traders say oil prices rose 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'scomments over the last 24 hours."
Some market participants are now encouraged by Draghi's commentson 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 Thursday morning - also contributed to the gains in the WTI contract outpacing Brent crude.
These price gains are hitting consumers. This weekend, drivers will pay the highest prices at the pump in two months. The national average for retail gasoline is $3.57 a gallon. Gasoline prices are up 8 cents on average since last week and have jumped 7 percent from a month ago.
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