NEW YORK (MarketWatch) -- Crude-oil futures turned higher Thursday, gaining after reports showed improvements in manufacturing conditions in the Philadelphia region as well as in an index of leading economic indicators.
Meanwhile, natural-gas futures lost ground hard on the heels of the government's latest weekly update on gas in storage.
Crude for July delivery was last up 50 cents, or 0.8%, at $71.53 a barrel on the New York Mercantile Exchange. The contract had climbed as high as $71.73 a barrel earlier on Globex.
Manufacturing firms in the Philadelphia region reported the best business conditions since September, the Federal Reserve Bank of Philadelphia said. The Philly Fed index improved to negative 2.2 in June from a reading of negative 22.6 in May. See Economic Report.
Separately, the Conference Board said an improvement in its index of leading economic indicators suggest that the U.S. recession is "losing steam" and that a slow recovery should begin by the end of 2009. See full story.
Earlier, a government report showed continuing claims for jobless benefits fell to the lowest level seen since early May. See story.
Crude prices had come under pressure earlier along with European stocks after "unexpected news" that U.K. retail sales fell for the first time in three months, according to BMO Capital Markets.
On Wednesday, the benchmark contract gained 56 cents to end at $71.03 a barrel in Nymex trading, after the government reported a bigger-than-expected drop in crude stockpiles for last week as well as an increase in gasoline demand.
Over the last four weeks, motor gasoline demand has averaged nearly 9.3 million barrels a day, up by 1.1% from the same period last year, the Energy Information Administration reported on Wednesday.
The agency also said crude supplies decreased by 3.9 million barrels.
In a report to clients shortly after the data's release, Chris Lafakis, an economist at Moody's Economy.com, referred to the supply report as a "bullish one."
"Imports did not rebound," he said. "The pace of imports is too low to sustain oil inventories."
As for natural gas, inventories rose 114 billion cubic feet in the week ended June 12, the latest data compiled by the EIA showed. Analysts surveyed by energy information provider Platts had expected an increase between 107 billion to 112 billion cubic feet.
On Nymex, natural gas for July delivery extended earlier losses, down 2.4% to $4.151 per million British thermal units.
