HOUSTON: Oil prices ticked higher on Thursday as US job data eased demand concerns and escalating tensions in the Middle East helped prices bounce back for a third straight session, after hitting an eight-month low on Monday.
Brent crude futures rose 57 cents or 0.73% to $78.90 a barrel by 11:31 a.m. EDT. US West Texas Intermediate crude rose 87 cents, or 1.16%, to $76.10.
Prices were buoyed on Thursday after data showed the number of Americans filing new applications for unemployment benefits fell more than expected last week, suggesting fears the labour market is unravelling were overblown.
“The latest US data on jobless claims indicates still a growing US economy, reducing some of the oil demand concerns,” UBS analyst Giovanni Staunovo said.
Investors were also digesting a 3.7 million barrel drop in US crude inventories last week reported by the Energy Information Administration on Wednesday, a drop which far exceeded analysts’ expectations and marked a sixth straight weekly decline to six-month lows.
Elsewhere, the killing of senior members of militant groups Hamas and Hezbollah last week raised the possibility of retaliatory strikes by Iran against Israel, stoking concerns over oil supply from the world’s largest producing region.
“It will spike the price of crude oil if there is an Iranian retaliation on a large scale and I think that is what everyone is most worried about,” said Tim Snyder, chief economist at Matador Economics.
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