Oil prices rose on Thursday, snapping two days of losses, as falling claims for US jobless benefits fed hopes about the economy, while crude also got a lift as gasoline futures jumped on news of a refinery outage. US gasoline futures led energy complex gainers, ending up more than 1 percent after falling the day before on data showing gasoline stocks rose sharply last week.
Cash market gasoline prices in the New York Harbor jumped due as the operator of the giant 500,000 barrels per day Hovensa LLC refinery in St. Croix, US Virgin Islands, confirmed unscheduled repairs to a gasoline-making unit. The refinery delivers supplies to the harbour.
US crude for January delivery settled up 9 cents at $88.37 a barrel, in choppy trading. On Tuesday US crude surged to a 26-month intraday high of $90.76. US January gasoline ended 3.59 cents higher at $2.3405 a gallon. In London, ICE January Brent crude finished 22 cents higher at $90.99 a barrel.
US data showed the number of first-time claims for jobless benefits fell more than expected last week and the four-week average dropped to a two-year low, renewing hopes for a labour market recovery. In late trading, the dollar rose 0.1 percent against a basket of currencies, helping pare crude's gains. Earlier, crude got a boost as the dollar extended losses against the yen and pared gains against the euro as yields on US Treasuries fell after a well-bid 30-year bond auction.
Oil investors watched for any signs of deviation from expectations that the Organisation of Petroleum Countries would keep production policy unchanged at a weekend meeting. Opec said it wanted an improvement in oil market fundamentals before increasing crude supplies, even if prices go to $100 a barrel. "If it goes to $100 due to speculation, Opec will not move," said Opec Secretary General Abdullah al-Badri in Quito, Ecuador, where the group will meet on Saturday.
On the negative side, supplies of European oil products mostly rose in November as refinery utilisation jumped 8 percentage points, Euroilstock data showed. Gas oil stocks held in the Amsterdam-Rotterdam-Antwerp oil hub rose by 3 percent last week despite a cold snap blanketing western Europe, a report from Dutch oil analyst Pieter Kulsen also showed.
Traders were cautious as China is widely expected to raise interest rates soon to cool its high-flying economy, a move that should dampen demand in the No 1 energy consumer. "We would be cautious going into next week, with the very real possibility that the Chinese may move on the rate front," said Edward Meir, oil analyst at brokers MF Global.
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