By Myra P. Saefong and William Watts
Oil futures ended higher on Thursday, as a fall in U.S. weekly jobless claims to a new pandemic low and progress toward a fresh coronavirus aid package boosted prospects for energy demand.
Prices also found support after Russia’s President Vladimir Putin said his country has not ruled out delaying production increases by the Organization of the Petroleum Exporting Countries and their allies that are set to be implemented in January, Bloomberg News reported Thursday . The group of producers, collectively known as OPEC+, includes Russia.
“An agreement between Saudi and Russia on extending the current levels of cuts would be an important first step. But the two states would also need to get buy-in from other Opec-plus members, which have struggled to implement their share of the cuts,” Amena Bakr, deputy bureau chief at Energy Intelligence, tweeted Thursday .
West Texas Intermediate crude for December delivery rose 61 cents, or 1.5%, to settle at $40.64 a barrel on the New York Mercantile Exchange. December Brent crude , the global benchmark, added 73 cents, or nearly 1.8%, at $42.46 a barrel on ICE Futures Europe.
WTI tumbled 4% on Wednesday, while Brent lost 3.3%.
“Overall optimism in the U.S. markets, specifically [Thursday’s] Department of Labor report showing the lowest initial jobless claims since March ” has provided support for oil, Manish Raj, chief financial officer at Velandera Energy, told MarketWatch. “Overall optimism supports the market’s expectation for a gradual recovery of oil demand in the U.S., the world’s largest consuming nation.”
The “physical oil markets are otherwise well balanced, with global inventory remaining steady,” with output cuts in the U.S. and mandatory cuts by OPEC+, said Raj. “The balance is also supported by solid demand recovery in China and India, the world’s largest crude importers.”
Some analysts said upside for oil was likely to remain limited after an unexpected rise in U.S. gasoline inventories in weekly data that underlined concerns over fuel demand.
While Energy Information Administration data released Wednesday showed U.S. crude inventories fell less than expected last week, it was a rise in gasoline stocks “which proved not great for sentiment,” said Warren Patterson, head of commodities strategy at ING, in a note.
The EIA reported a 1.9 million barrel rise in gasoline inventories versus expectations for a decline.
“It was also the largest gasoline build since June, and comes despite the fall in refinery utilization over the week,” Patterson said. “ A fall in implied gasoline demand did not help,” falling 287,000 barrels a day over the week.
On Thursday, November gasoline added 1.6% at $1.1581 a gallon after a 4% drop on Tuesday. November heating oil rose 1.8% to $1.1607 a gallon.
November natural gas edged down 0.5% to $3.007 per million British thermal units.
The U.S. Energy Information Administration reported Thursday that domestic supplies of natural gas rose by 49 billion cubic feet for the week ended Oct. 16. On average, supplies were expected to climb by 51 billion cubic feet for the week, according to analysts polled by S&P Global Platts.