MW: Oil gains as investors cheer ECB, jobless data
Growing doubts over Greek referendum also support crude, up 2%
By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures gained Thursday, surging past $94 a barrel as investors cheered the European Central Bank’s surprise interest-rate cut, fewer filings for U.S. jobless claims and growing doubt that Greece would proceed with its bailout referendum.
Crude for December delivery CL1Z +2.21% added $1.92, or 2%, to $94.40 a barrel on the New York Mercantile Exchange. It had traded in the red for most of Asian trading hours and started the U.S. floor trading session with minor gains.
Oil markets have been buffeted by Greece and its referendum, and news that the popular vote may not happen helped push prices higher, said Tom Bentz, a director at BNP Paribas in New York.
Members of the ruling socialist party have reportedly revolted against the referendum, and Prime Minister George Papandreou has reached out ot members of the opposition, according to news reports. Other reports go further, saying the embattled leader has abandoned the idea. Read more about Greece's referendum.
News on Monday that Greece would submit a hard-won bailout package to a popular vote tanked financial markets over the first two days this week.
Investors also focused on some positive U.S. macroeconomic data on Thursday, Bentz said. Chief among them was a report showing first-tme jobless claims fell below 400,000 last week, the lowest in a month and a half.
The Labor Department reported initial jobless claims dropped 9,000 to 397,000 in the week ended Oct. 29. Read details on jobless claims
Counterbalancing the positive news on the jobs front, another report showed the U.S. services sector expanded at a slower pace in October.
The Institute for Supply Management reported its non-manufacturing index eased to 52.9% from 53.0% in September, catching markets by surprise as economists had been looking for an increase to 53.5%.
Also Thursday, the European Central Bank cut its key lending rate by a quarter of a percentage point, to 1.25%. Most analysts had expected it would keep the rates unchanged and only move to cut rates later in the year. Read more on ECB rate cut
Mario Draghi, who took the helm as president of the Frankfurt-based central bank just this week, said the decision was unanimous and needed as risks for the euro zone’s economy grew.
The 17-nation euro-zone bloc has been battling a sovereign-debt crisis in its peripheral countries that has lasted for the better part of two years, with Greece in the forefront.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
