Oil above $75 on U.S. crude stock drop, jobless data

By Brian Ellsworth

NEW YORK (BestGrowthStock) – Oil rose above $75 per barrel on Thursday, boosted by better-than-expected U.S. jobless data and a draw on U.S. crude stocks.

Crude stocks fell by 4.96 million barrels last week, a weekly Energy Information Administration report showed, more than analysts polled by Reuters had expected. (EIA/S: )

“Today’s data should reinforce the bullish short-term undertone for the energy complex,” said Chris Jarvis of Caprock Risk Management in Hampton Falls, New Hampshire.

Oil prices rose in tandem with equities markets, on solid earnings from key retail chains, and after U.S. Labor Department data on Thursday showed jobless claims fell more than expected last week, to their lowest level in two months.

U.S. crude oil futures for August delivery settled at $75.44 per barrel, up $1.37. That takes two-day gains to $3.46 per barrel, a 4.8 percent rise — the biggest two-day percentage gain since June 9-10.

Prices rose as much as $1.83 to $75.90 a barrel earlier, the highest intraday price since June 30.

Brent crude settled up by $1.20, or 1.63 percent, at $74.71 per barrel.

Also supportive, the Dow Jones Industrial (.DJI: ) average was up 0.51 percent, while the S&P 500 (.SPX: ) was up 0.20 percent in afternoon trading. Rising stock markets signal optimism about a continued economic recovery, which would boost oil demand.

Oil prices in New York were still well below their 19-month peak above $87 reached in early May, although they have rebounded sharply from a trough below $65 on May 20.

Some of the bullish sentiment was tempered by EIA data that also showed U.S. gasoline inventories unexpectedly rose by 1.32 million barrels last week, although distillate fuel stocks rose a less-than-expected 321,000 barrels.

(Graphic: http://link.reuters.com/quq56m)

The International Monetary Fund raised its 2010 global growth forecast on Thursday, citing an expansion in Asia and in U.S. private sector demand. The IMF raised its 2010 global output growth forecast to 4.6 percent from 4.2 percent after a fall of 0.6 percent in 2009.

The IMF said a double-dip recession was unlikely, which helped boost the outlook for oil demand.

STORM WARNING

A tropical depression made landfall mid-morning in the southern tip of Texas, near the Mexican border, but the storm did not impact oil production as its path missed refineries and platforms.

Tropical storms can disrupt oil production in the Gulf of Mexico and force the closure of facilities used to import crude oil. The inventory draw reported by the EIA was in part spurred by Hurricane Alex, which last week battered northern Mexico.

Oil inventories at the key U.S. Cushing, Oklahoma, crude oil hub fell 353,762 barrels in the week to July 6 to 38.9 million barrels, figures from energy industry data provider Genscape showed on Thursday.

The EIA said Cushing crude stocks fell by 184,000 barrels in the week to July 2.

Cushing is the delivery point of the NYMEX oil futures contracts, and when inventories are high it tends to weigh on the front months of the futures curve relative to the back.

On Wednesday, the EIA raised its 2010 world oil demand growth forecast by 60,000 barrels per day (bpd) from its previous estimate. The EIA now expects oil demand to climb by 1.56 million bpd in 2010 to 85.82 million bpd.

(Additional reporting by Gene Ramos in New York, Alex Lawler in London and Alejandro Barbajosa in Singapore; Editing by Lisa Shumaker)

Oil above $75 on U.S. crude stock drop, jobless data