Crude Oil Ends Sharply Higher On Saudi Production Cut News

(RTTNews) - U.S. crude oil surged to end sharply higher on Thursday, boosted by reports that Saudi Arabia has cut its crude output to prop up prices, even as some strong earnings and upbeat data raised hopes the global economy would recover sooner than initially anticipated.

Oil prices got a boost after reports emerged that Saudi Arabia -- the biggest crude oil exporter in the world, shipped 9.36 million barrels a day in September, down 328,000 barrels a day from August, excluding quantity in storage.

The OPEC had earlier indicated the cartel will maintain its output without any cut in production, with some member countries preferring to slash prices in order to gain share of the market.

Last week, oil prices had tumbled to the lowest level in nearly four years, amid concerns over excess supply globally, with OPEC member countries reportedly unwilling to cut crude production.

After yesterday's sharp setback, oil started off on a sluggish note this morning and very nearly slipped below $80 before staging a recovery.

Light Sweet Crude Oil futures for December delivery, the most actively traded contract, surged $1.57 or 1.9 percent to close at $82.09 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for December delivery scaled a high of $82.37 a barrel intraday and a low of $80.05.

On Wednesday, crude oil futures ended down $1.97 or 2.4 percent at $80.52 a barrel, after official data showed U.S. crude oil inventories to have surged much more than expected last week.

Data released by the U.S. Energy Information Administration on Wednesday showed U.S. crude oil inventories to have risen by 7.1 million barrels to 377.7 million barrels in the week ended October 17, three times more than the expected increase of 2.7 million barrels.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 85.85 on Thursday, up from its previous close of 85.75 late Wednesday in North American trade. The dollar scaled a high of 85.94 intraday and a low of 85.66.

The euro trended higher against the dollar at $1.2659 on Thursday, as compared to its previous close of $1.2647 late Wednesday in North American trade. The euro scaled a high of $1.2675 intraday and a low of $1.2616.

In economic news, data from the U.S. Labor Department showed initial jobless claims to have risen by 17,000 to a seasonally adjusted 283,000 in the week ended October 18, from the previous week's revised total of 266,000. Economists expected claims to rise to 285,000 from 264,000 originally reported in the previous week.

A report from the Conference Board showed its index of leading U.S. economic indicators rose 0.8 percent in September. Economists expected the index to rise by 0.6 percent compared to the 0.2 percent uptick originally reported for the previous month.

A preliminary reading of China's HSBC manufacturing index inched up to a three-month high of 50.3 in October from 50.2 in September, above the forecasts for 50.3. However, the level of output in factories fell to a five-month low of 50.7 in October.

A report from Markit Economics showed eurozone private sector to have logged a marginal upturn in October helped by an improvement in Germany, even as France moved deeper into contraction. The headline flash Eurozone Markit composite output index rose to 52.2 in October from a 10-month low of 52 in September.

The services Purchasing Managers' Index remained unchanged at 52.4 in October when it was expected to drop to 52. The manufacturing PMI advanced to 50.7 from 50.3 in September, confounding expectations for a fall to 49.9.

Meanwhile, in Asia, a preliminary reading of China's HSBC manufacturing index inched up to a three-month high of 50.3 in October from 50.2 in September and above forecasts for 50.3. However, the level of output in factories fell to a five-month low of 50.7 in October.

Eurozone consumer confidence improved unexpectedly in October after weakening in the previous four months, preliminary data from the European Commission showed Thursday. The flash consumer confidence indicator rose to -11.1 from a seven-month low of -11.4 in September. Economists had forecast a weaker score of -12. For the EU, the consumer confidence index increased by 0.6 points to -7.4.

Elsewhere in Europe, U.K. retail sales declined more-than-expected in September, driven by a sharp contraction in clothing sales. Retail sales fell 0.3 percent in September from a month ago, when it rose 0.4 percent, the Office for National Statistics said Thursday. This was the first drop in four months. Economists had forecast a 0.1 percent drop for September.