oil

Oil prices jumped today, as robust US jobs data raised expectations of a better prospect for demand in the world’s top oil consumer, while prices got additional support from concerns over supplies from the Middle East.

Brent crude gained by 30 cents at $109.26 a barrel, while US oil rose by 15 cents to $93.18 a barrel, reported Reuters.

In the US, the number of new claims for unemployment benefits has declined for a third straight week, indicating that a revival in the labour market is gaining momentum.

The improvement in employment pushed the Dow Jones industrial average to extend its winning streak to ten days on Thursday.

Prices got some more support from the US President Barack Obama’s announcement that military force in Iran is an option if sanctions and diplomacy fail to stop the country’s nuclear programme. Concerns surrounding the stalemate between the Western powers and Iran‘s controversial nuclear programme is expected to escalate and disrupt oil supplies.

"In the US, the number of new claims for unemployment benefits has declined for a third straight week."

Middle East supply concerns kept Brent above $100 a barrel through most of 2012 and in 2013. On the other hand, US oil has increased faster than Brent, as investors are slowing down positions on the spread of the two contracts CL-LCO1=R.

The disparity has narrowed about eight dollars a barrel after reaching $23.45 on 8 February, the maximum since the end of November.

The US benchmark gained faster, driven by progress on a key pipeline, which is anticipated to help ease an oil excess in the US from a drilling boom.

On Thursday, a bipartisan bill was introduced in the US Senate, giving Congress the power to approve TransCanada’s Keystone XL pipeline project, which will link Canada’s oil sands with refineries and ports in Texas.


Image: The number of new claims in the US for unemployment benefits dropped. Photo courtesy of freedigitalphotos / nuttakit.

Energy