INV: Crude oil futures trim gains after Draghi, U.S. economic data
Investing.com - Crude oil futures trimmed gains during U.S. morning hours on Thursday, as the euro came under heavy selling pressure following comments from European Central Bank President Mario Draghi, while weaker-than-forecast U.S. jobs data also weighed.
On the New York Mercantile Exchange, light sweet crude futures for delivery in March traded at USD96.86 a barrel during U.S. morning trade, up 0.25% on the day.
New York-traded oil prices rose by as much as 0.7% earlier in the day to hit a session high of USD97.21 a barrel, the strongest level since February 4.
The euro weakened broadly after ECB President Mario Draghi said earlier that the bank would closely monitor developments in the markets to see if the stronger euro had an effect on inflation projections, amid concerns over the effect of the single currency’s appreciation on the economic recovery in the region.
Draghi’s comments came after the ECB left rates on hold at a record low 0.75% earlier, in a widely anticipated decision.
Also Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending February 3 fell by 5,000 to a seasonally adjusted 366,000, compared to expectations for a decline of 11,000 to 360,000.
Jobless claims for the preceding week were revised up to 371,000 from a previously reported gain of 368,000.
A separate report showed that non-farm business sector labor productivity fell by a seasonally adjusted 2% in the fourth quarter, compared to expectations for a decline of 1.3%.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.35% to trade at 80.10, erasing an earlier loss of as much as 0.3%.
Dollar-denominated oil futures contracts tend to fall when the dollar strengthens, as this makes oil more expensive for buyers in other currencies.
Oil traders were now looking ahead to China's trade numbers due out on Friday for more clues on the health of the world’s second largest oil consumer.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery rose 0.6% to trade at a four-and-a-half-month high of USD117.44 a barrel.
The spread between the Brent and crude contracts widened to USD20.58 a barrel, the largest gap since late-December.
The spread between the two contracts has grown amid renewed concerns over the glut of oil supply in storage at Cushing, Oklahoma, the trading hub for NYMEX oil.
Operators of the Seaway Pipeline said on January 31 that restrictions will limit flows on the key pipeline until late 2013. The pipeline began carrying crude to the Gulf Coast area from Cushing, last month after the flow direction was reversed.
