Crude advances for sixth day as U.S. jobless claims decrease

U.S. stockpiles fell adding fuel to oil rally

West Texas Intermediate crude rose for a sixth day as fewer Americans than forecast filed first- time claims for unemployment insurance payments last week.

Prices climbed as applications for jobless benefits decreased by 16,000 to 339,000, the lowest level since March 9, the Labor Department reported. Economists projected 350,000 claims in a Bloomberg survey. Oil also gained as the Energy Information Administration said yesterday that U.S. gasoline stockpiles tumbled.

“There’s been concern about the U.S. economy but the jobless claims number makes the picture a little bit better,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “It’s a bit bullish for oil. We are also getting a bounce from that inventory report yesterday.”

WTI for June delivery gained 39 cents, or 0.4 percent, to $91.82 a barrel at 11:17 a.m. on the New York Mercantile Exchange after touching $91.98. The volume of all futures traded was 16 percent below the 100-day average. Oil has advanced 4.3 percent so far this week and is unchanged this year.

Brent for June settlement increased 65 cents, or 0.6 percent, to $102.38 a barrel on the London-based ICE Futures Europe exchange. Volume was 16 percent above the 100-day average.

WTI-Brent Spread

The European benchmark crude’s premium to WTI widened to $10.56 from yesterday’s $10.30. The spread shrank to $9.94 earlier, the least since January 2012.

Last week’s jobless claims were below the lowest estimate of 340,000 in the Bloomberg survey of 49 economists. The Labor Department revised the previous week’s figure up to 355,000, from an initially reported 352,000.

“We did get a little bit of a bounce off the drop in jobless claims,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “We have pretty good resistance near the $92 level.”

Oil increased 5.5 percent in the five days through yesterday. Future settled at $86.68 a barrel on April 17, the lowest price since December. If futures hold their gains for a sixth day today, it would be the longest rally since July.

“The move lower was a bit overdone and we’ve now stabilized over $90,” said John Kilduff, a partner at Again Capital LLC, a New York energy hedge fund. “The inventory data yesterday was somewhat bullish, especially the drop in gasoline.”

Gasoline Stockpiles

U.S. gasoline inventories fell 3.93 million barrels last week to 217.8 million, the biggest drop in a year, the EIA, the Energy Department’s statistical arm, said yesterday. Oil supplies increased 947,000 barrels to 388.6 million, the highest level since July 1990.

Crude also gained as U.S. stocks moved higher. The Standard & Poor’s 500 Index rose as much as 0.7 percent, heading for a fifth daily advance.

“The S&P is higher and that’s bringing up oil,” said Rich Ilczyszyn, chief market strategist and founder of commodities trading firm Iitrader.com in Chicago.

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