Crude Oil Ends Higher On Upbeat Data

(RTTNews) - U.S. crude oil ended higher for a third session Thursday, tracking rising global equity markets with some upbeat initial claims data for U.S. unemployment benefits and ahead of the crucial jobs data for January due tomorrow. Oil prices also found support with demand for heating oil continuing to soar, while crude oil inventories fell much less than expected last week, coupled with supply disruptions from Libya.

On the economic front, the European Central Bank on Thursday left its main lending rate unchanged at 0.25%, in line with expectations. The ECB indicated continuation of its low interest rates, while terming the economic recovery as uneven and fragile. As well, the Bank of England left its bond-buying program unchanged while holding on to its key lending rate at a record low of 0.5%.

In economic news from the U.S., initial jobless claims for U.S. unemployment benefits pulled back more than expected in the week ended February 1, after reporting a bigger-than-expected increase in the previous week. Meanwhile, labor productivity in the U.S. increased more than expected in the fourth quarter of 2013, with output showing another significant increase, a Labor Department report showed Thursday.

Light Sweet Crude Oil futures for March delivery, the most actively traded contract, gained $0.46 or 0.5 percent to close at $97.84 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for March delivery scaled a high of $98.89 a barrel intraday and a low of $97.25.

Yesterday, oil ended higher after a report from the Energy Information Administration showed crude stockpiles in the U.S. to have increased last week, albeit less than expected.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.89 on Thursday, down from its previous close of 81.04 late Wednesday in North American trade. The dollar scaled a high of 81.23 intraday and a low of 80.73.

The euro traded higher against the dollar at $1.3591 on Thursday, as compared to its previous close of $1.3533 late Wednesday in North America. The euro scaled a high of $1.3620 intraday and a low of $1.3484.

In economic news, initial jobless claims for U.S. unemployment benefits dropped to 331,000, a decrease of 20,000 from the previous week's revised figure of 351,000. Economists expected jobless claims to drop to 337,000 from the 348,000 originally reported for the previous week.

Meanwhile, labor productivity in the U.S. rose 3.2 percent in the fourth quarter following a revised 3.6 percent increase in the third quarter. Economists expected a rise of about 2.6 percent. The increase in productivity, a measure of output per hour, came as output surged up by another 4.9 percent in the fourth quarter after jumping by 5.4 percent in the third quarter.

U.S. trade deficit widened more than expected in December, due partly to a notable pullback in the value of exports, a report from the Commerce Department showed Thursday. U.S. trade deficit widened to $38.7 billion in December from a revised $34.6 billion in November. Economists expected a deficit of $36.0 billion.

Exports dropped 1.8 percent to $191.3 billion in December after climbing 0.8 percent to a record high of $194.8 billion in November. Imports edged up 0.3 percent to $230.0 billion in December after sliding 1.3 percent to $229.4 billion in the previous month.

From the eurozone, European Central Bank Governing Council kept its main refinancing rate at a record low 0.25 percent for a third consecutive month. The marginal lending facility rate was maintained at 0.75 percent and the deposit facility rate at zero, where it has remained since July 2012.

ECB President Mario Draghi said the outlook for euro area inflation remains subdued due to a weaker economy and the bank is ready to consider all available instruments to tackle any money market volatility.

Draghi added "We continue to expect the key ECB interest rates to remain at present or lower levels for an extended period of time."

Elsewhere in Europe, the Bank of England decided to leave its loose monetary policy unchanged on Thursday, in line with the forward guidance announced last year. The nine-member Monetary Policy Committee retained the interest rate at a record low 0.50 percent and the quantitative easing at GBP 375 billion. This was in line with economists' expectations.