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Crude oil rallies over 1% but supply data still weighs

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Investing.com -

Investing.com - U.S. oil futures rallied over 1% on Friday, easing off a more than two-year low hit on Thursday although the release of higher than expected U.S. crude supply data continued to weigh heavily on the commodity.

On the New York Mercantile Exchange, crude oil for delivery in November traded at $84.09 a barrel during European early afternoon trade, up 1.39$ or 1.68%.

Prices jumped 0.92$ or 1.12% on Thursday to settle at $82.70.

Futures were likely to find support at $79.78 a barrel, Thursday's low and the lowest level since June 2012 and resistance at $86.29, the high from October 10.

Sentiment recovered mildly on Thursday after the U.S. Department of Labor reported that the number of individuals filing for initial jobless benefits in the week ending October 11 decreased by 23,000 to a 14-year low of 264,000 from the previous week's total of 287,000.

Analysts had expected jobless claims to rise by 3,000 to 290,000 last week.

A separate report showed that U.S. industrial production climbed 1.0% last month, beating expectations for a 0.4% rise.

But oil prices sharply weakened after the U.S. Energy Information Administration said in its weekly report on Thursday that U.S. crude oil inventories increased by 8.9 million barrels in the week ending October 10, exceeding expectations for a rise of 2.8 million barrels.

The report also showed that gasoline stockpiles dropped by 3.9 million barrels, compared to expectations for a decline of 1.2 million barrels.

Oil prices were also under pressure after data this week showed that China's consumer inflation fell to near five-year lows and U.S. producer prices declined for the first time in more than a year.

Traders were now turning their attention to upcoming U.S. reports on building permits and housing starts, as well as a preliminary report on consumer sentiment due later Friday for further indications on the strength of the country's recovery.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for December delivery jumped 1.21$, or 1.40%, to hit $87.02 a barrel.

The spread between the Brent and the WTI crude contracts stood at $2.93.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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