Crude Oil Ends Higher On Russian Action

(RTTNews) - U.S. crude oil ended higher Thursday, on deepening tensions between Russia and the West over Ukraine and on some upbeat economic data from the U.S. with first-time claims for U.S. unemployment benefits dropping more than expected last week.

Investors treaded with caution over the oil supply situation after an official weekly report from the Energy Information Administration showed U.S. crude oil stockpiles to have declined more than expected last week.

The focus on Ukraine continued with Russia reacting sharply to last week's sanctions from the U.S. and European Union for its alleged support to separatists in eastern Ukraine. Russia retaliated with the imposition of a ban on imports of agricultural produce from the U.S. and restrictions on import of fruits and vegetables from Europe.

A Labor Department report showed first-time claims for U.S. unemployment benefits declined last week, after reporting a rebound in the week before.

Light Sweet Crude Oil futures for September delivery, the most actively traded contract, gained $0.42 or 0.4 percent to close at $97.34 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for September delivery scaled a high of $97.48 a barrel intraday and a low of $96.55.

On Wednesday, crude oil futures ended down $0.46 or 0.5 percent at $96.92 a barrel despite official inventory data showing a more than expected drop in crude oil stockpiles in the week ended August 1.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.50 on Thursday, up from its previous close of 81.43 late Wednesday in North American trade. The dollar scaled a high of 81.64 intraday and a low of 81.38.

The euro traded lower against the dollar at $1.3363 on Thursday, as compared to its previous close of $1.3383 late Wednesday in North American trade. The euro scaled a high of $1.3393 intraday and a low of $1.3338.

In economic news from the U.S., a report from the Labor Department showed initial jobless claims to have unexpectedly declined to 289,000 in the week ended August 2, a decrease of 14,000 from the previous week's revised level of 303,000.

The European Central Bank today held its key lending rate unchanged at 0.15 percent, as expected. The bank maintained the deposit rate at -0.10 percent.

Meanwhile, the Bank of England kept its key rate at a record low on Thursday, sticking to its forward guidance even as the strong pace of economic recovery augmented speculation for a rate hike late this year. The nine-member Monetary Policy Committee decided to keep its key bank rate unchanged at 0.50 percent and the asset purchase program at GBP 375 billion.

Germany's industrial production grew marginally at a slower-than-expected pace in June, as geopolitical instability weighed on economic activity, data showed Thursday.

German industrial output increased 0.3 percent month-on-month in June, reversing the revised 1.7 percent fall in May, Destatis reported. This was slower than the expected 1.2 percent increase. Nonetheless, it was the first rise in four months.