Crude Oil Soars Above $60 As Dollar Weakens

(RTTNews) - U.S. crude oil ended sharply higher for a second straight session on Thursday, as the dollar weakened against a select band of currencies amid signs the Federal Reserve will hold interest rates at zero for the time being. Crude prices were also impacted after official data from the Energy Information Administration yesterday showed crude stockpiles in the U.S. to have declined more than expected last week.

Minutes from the April meeting of the Fed released yesterday afternoon showed only a few policy makers wanting to consider a June rate hike. The news put pressure on the dollar, but disappointing economic data from the U.S. and Europe put a cap on oil's gains.

A Labor Department report on Thursday showed a bigger than expected increase in initial jobless claims in the week ended May 16, although the four-week moving average of claims fell to a new fifteen-year low.

The National Association of Realtors' report showed an unexpected decrease in existing home sales in the U.S. in April, with lagging supply relative to demand putting upward pressure on home prices.

Meanwhile, the Federal Reserve Bank of Philadelphia's Manufacturing Business Outlook Survey showed regional manufacturing activity in May to have increased at a slower rate.

Elsewhere in Europe, flash data from Markit on Thursday showed the eurozone economy to have lost growth momentum for a second successive month in May, while eurozone consumer confidence deteriorated for a second month in May and at a faster-than-expected pace.

Investors also kept a close watch on fighting in the Middle East, particularly in Yemen and Iraq. ISIS militants continued to push deeper towards the Iraqi capital of Baghdad, raising fears of a broader conflict that could involve U.S. forces.

Light Sweet Crude Oil futures for July delivery, the most actively traded contract, surged $1.74 or 3 percent, to settle at $60.72 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for July delivery scaled a high of $60.94 a barrel intraday and a low of $58.69.

On Wednesday, crude oil for July delivery jumped $0.99 or 1.7 percent, to settle at $58.98 percent, after official data from the Energy Information Administration showed crude stockpiles in the U.S. to have declined more than expected last week, although production continued to remain firm.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 95.32 on Thursday, down from its previous close of 95.59 on Wednesday in late North American trade. The dollar scaled a high of 95.65 intraday and a low of 94.97.

The euro trended higher against the dollar at $1.1123 on Thursday, as compared to its previous close of $1.1096 in North American trade late Wednesday. The euro scaled a high of $1.1186 intraday and a low of $1.1081.

On the economic front, a Labor Department report on Thursday showed a bigger than expected increase in initial jobless claims in the week ended May 16, although the four-week moving average of claims dropped to a new fifteen-year low. Initial jobless claims climbed to 274,000, an increase of 10,000 from the previous week's unrevised level of 264,000. Economists expected jobless claims to increase to about 270,000.

The National Association of Realtors Thursday revealed an unexpected decrease in existing home sales in the U.S. in April, with lagging supply relative to demand putting upward pressure on home prices. NAR said existing home sales fell 3.3 percent to an annual rate of 5.04 million in April from an upwardly revised 5.21 million in March. Economists expected existing home sales at 5.24 million from the 5.19 million originally reported for the previous month.

Firms responding to the Federal Reserve Bank of Philadelphia's Manufacturing Business Outlook Survey revealed that regional manufacturing activity unexpectedly increased at a slower rate in May.

A report released by the Philly Fed on Thursday showed its diffusion index of current activity to have dipped to 6.7 in May from 7.5 in April. While a positive reading indicates continued growth in regional manufacturing activity, economists had expected the index to inch up to 8.0.

Suggesting the paltry economic growth in the first quarter may be temporary, a Conference Board report on Thursday showed its index of leading U.S. economic indicators rose much more than anticipated in April. The Conference Board's said its leading economic index advanced 0.7 percent in April after climbing by an upwardly revised 0.4 percent in March. Economists expected the index to rise by 0.3 percent compared to the 0.2 percent increase originally reported for the previous month.

On the economic front, the manufacturing sector in China remained in contraction in May, albeit at a slower pace, the latest survey from HSBC revealed on Thursday with a two-month high PMI score of 49.1. That was shy of expectations for a score of 49.3, although it was up from 48.9 in April. It also remained beneath the boom-or-bust line of 50 that separates expansion from contraction.

Eurozone consumer confidence deteriorated for a second straight month in May and at a faster-than-expected pace, preliminary estimates from the European Commission showed Thursday. The flash consumer confidence index dropped to -5.5. from -4.6 in April. Economists had forecast a score of -4.8.

The euro area current account surplus declined for the second consecutive month in March, with the drop more than the expectations of economists, due to a decrease in the surplus on goods trade and lower primary income, data published by the European Central Bank showed Thursday.

The current account surplus dropped to a seasonally adjusted EUR 18.6 billion from EUR 27.3 billion in February. Economists expected a bigger surplus of 26 billion euros.

The Eurozone economy lost growth momentum for a second successive month in May, flash data from Markit showed Thursday. The composite Purchasing Managers' Index dropped to 53.4 in May from 53.9 in April. The reading was expected to remain unchanged at 53.9.

Germany's private sector grew at the slowest pace in five months in May, flash survey data from Markit revealed Thursday. The flash composite output index fell to 52.8 in May, a 5-month low, from 54.1 in April. Despite signaling an expansion, the rate of growth was the weakest in 2015 so far.

The French private sector expanded at a moderate pace in May, flash survey data from Markit showed Thursday. The flash composite output index rose to 51 in May from 50.6 in April. The private sector output grew for the fourth consecutive month in May.

U.K. retail sales recovered at a faster-than-expected pace on clothing demand in April, providing a notable support to economic growth at the start of second quarter. The volume of retail sales including auto fuel expanded 1.2 percent month-on-month reversing a 0.7 percent fall in March, the Office for National Statistics reported Thursday. This was the fastest growth since November and exceeded a 0.4 percent rise forecast by economists.