BLBG: Crude Oil Rises After Unexpected Decline in U.S. Jobless Claims
Crude oil rose after the number of U.S. workers claiming jobless benefits unexpectedly fell last week, indicating the pace of economic decline may be slowing.
Oil climbed as much as 2.5 percent after the Labor Department reported that claims decreased by 53,000 to 610,000 in the week ended April 11, the fewest since January. China, the biggest oil consumer after the U.S., grew 6.1 percent during the first quarter, the slowest pace in almost 10 years.
“The rise in prices has nothing directly to do with oil,” said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. “We are getting tidbits of news from China and the U.S. that hint that the worst may be over.”
Crude oil for May delivery rose 21 cents, or 0.4 percent, to $49.46 a barrel at 11:24 a.m. on the New York Mercantile Exchange. Prices are up 11 percent so far this year.
The Federal Reserve said in its Beige Book business survey yesterday that economic contractions were slowing or stabilizing in San Francisco, the largest district, as well as in New York, Chicago, Kansas City and Dallas.
Chinese industrial production expanded 8.3 percent in March from a year earlier, up from 3.8 percent in the first two months, the statistics bureau said today in Beijing.
“Although the Chinese economy only grew at a disappointing 6.1 percent, industrial output rebounded strongly,” Barakat said. “The industrial growth is probably a result of the country’s huge stimulus program.”
Consumption
Crude oil in New York has tumbled from a record $147.27 in July as the recession in major consuming countries curbed fuel demand. The International Energy Agency reported on April 10 that worldwide consumption will shrink by 2.8 percent in 2009 as the global economy contracts 1.4 percent.
The IEA’s forecast is excessive and “badly calibrated,” according to analysts at Barclays Capital. The bank, the Organization of Petroleum Exporting Countries and the U.S. Energy Information Administration predict demand will decline about half as much.
“The IEA has now somewhat overcooked its forecast oil demand decline,” analysts led by Paul Horsnell said yesterday in a report from the investment bank of London-based Barclays Plc.
Brent crude oil for June settlement rose 67 cents, or 1.3 percent, to $53.11 a barrel on London’s ICE Futures Europe exchange.
