Crude oil rises as US jobless claims drop
Published 28/10/2010 | 15:24
Crude oil rose after US initial jobless claims declined, signaling increased fuel demand, and the dollar dropped against the euro.
Oil advanced as much 0.9pc after the Labour Department reported that applications for unemployment benefits decreased by 21,000 to 434,000 in the week ended October 23, the lowest level since early July.
The US currency dropped against the euro for the first time in three days, bolstering the appeal of commodities.
“‘Weekly jobless claims unexpectedly declined, sending the S&P 500 Index higher, and oil followed,’’ said Addison Armstrong, director of market research at Tradition Energy, a Stamford, Connecticut-based procurement adviser. ‘‘Given the weakness of the dollar it’s no surprise oil is higher.’’
Crude oil for December delivery climbed 59 cents, or 0.7pc, to $82.53 a barrel at 9:01am on the New York Mercantile Exchange.
Brent crude oil for December settlement rose 45 cents, or 0.5pc, to $83.68 a barrel on the London-based ICE Futures Europe exchange.
The dollar fell as the Federal Reserve considers buying government debt.
Estimates for the size of the asset-purchase program range from $1 trillion at Bank of America-Merrill Lynch to $2 trillion at Goldman Sachs Group Inc.
Economists at both firms agree the Fed will likely start by announcing a $500bn plan after policy makers’ meeting on November 2 and 3.
The US currency slumped as much as 0.9pc to $1.3889 against the euro, before trading at $1.3873 at 9:01am.
US gross domestic product rose at a 2pc annual pace in the third quarter, up from a 1.7pc rate in the previous three months, based on the median forecast in a Bloomberg News poll of economists before a Commerce Department report tomorrow.