Crude-oil futures rose Thursday after Greece agreed to an austerity package that would reduce concerns about the euro zone’s debt crisis. Crude prices were also helped by positive developments in the U.S., where a drop in weekly jobless claims boosted hopes that the economy of the world’s biggest oil consumer was on a recovery path. Light, sweet crude oil futures for March delivery rose $1.18, or 1.2%, to $99.89 a barrel on the New York Mercantile Exchange. Brent crude on ICE Futures Europe jumped $1.19, or 1%, to $118.39 a barrel.
Prime Minister Lucas Papademos’ office said leaders backing his coalition agreed Thursday to an austerity package that will comply with creditor demands ahead of another bailout. Details of the plan would be forthcoming. At a press conference in Frankfurt, European Central Bank President Mario Draghi said the Greek prime minister had informed him that an agreement has been endorsed by the country’s major political parties. Draghi also announced that the ECB would leave its main interest rate unchanged amid signs that the euro-zone economy is stabilizing. The drama in Greece–and the euro zone more broadly–has weighed on the oil market for months, denting demand for oil and refined goods and curbing investors’ appetite for risky assets like commodities.
Meanwhile, initial unemployment claims in the U.S. fell by 15,000 to 358,000 last week, the Labor Department said. The report bucked expectations for a rise in claims by 3,000 and offered further indication that the U.S. jobs market is improving. Last week, the Labor Department said nonfarm payrolls rose 243,000 in January, the biggest gain in nine months, while unemployment fell. High unemployment in the U.S. has kept motorists off the road and curbed demand for oil and refined products like gasoline.
Despite the recent improvements, however, demand shows no sign of improving. On Wednesday, the U.S. Department of Energy said its indirect measure of oil demand fell 0.5% to its lowest level in 13 years. That weak demand has kept a lid on oil prices, even as tensions between Iran and the West continue to stoke concerns about supply disruptions. Crude futures have traded in a tight range just under $100 a barrel for most of this year.
EasyForexNews Research Team