Investors await government data on natural-gas inventories
By Myra P. Saefong, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude futures climbed 3% Thursday as a drop in U.S. weekly jobless claims and Germany’s vote to approve an expanded euro-zone rescue fund helped buoy prospects for global oil demand.
Crude for November delivery CL1X +2.59% added $2.34, or 2.9%, to trade at $83.53 a barrel on the New York Mercantile Exchange.
“Traders are counting heavily on increased demand in Europe, and that will happen if the Europeans get their debt addressed and under control,” said Charles Perry, chief executive officer at energy-consulting firm Perry Management.
The German parliament on Thursday voted overwhelmingly to increase the size and flexibility of the euro-zone rescue fund. More than half of the euro zone’s 17 members have approved the package, which boosts the European Financial Stability Facility’s lending power to 440 billion euros ($599 billion) from €250 billion and gives it power to buy sovereign bonds, provide credit lines to governments and facilitate bank recapitalizations. Read more about the German vote.
Adding support to oil prices was news from the Labor Department that the number of Americans who filed applications for unemployment benefits sank last week to the lowest level since early spring. Jobless claims fell by 37,000 to 391,000 in the week ended Sept. 24. Read about jobless claims.
“Any economic news does have some impact on oil prices. Again this is just a glimmer of hope as of now,” said Perry. “Jobless claims need to get below 375,000 and stay below to have a significant impact on recovery. And to really boom, they need to drop below 200,000 and stay below for some time.”
Crude-oil futures had dropped 3.8% on Wednesday amid pressure from an unexpected 1.9 million-barrel rise in oil supplies for last week.
Elsewhere in energy trading Thursday, natural-gas futures traded lower ahead of an Energy Information Administration report on inventories due at 10:30 a.m. Eastern time.
In its first full session as a front-month contract, natural gas for November delivery NG11X -1.05% fell 3.9 cents, or 1%, to $3.76 per million British thermal units.
Analysts surveyed by Platts expect the EIA report to show an increase in supplies between 99 and 103 billion cubic feet for the week ended Sept. 23. That would be greater than the 73-Bcf increase a year ago and the five-year average build of 71 Bcf, according to the EIA data cited by Platts.
Also on Nymex, October gasoline futures RB1V +0.99% were up 2.6 cents, or 1%, at $2.68 a gallon.
Heating oil for the same month’s delivery HO1V +1.69% added 4.7 cents, or 1.7%, to $2.87 a gallon.
