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Oil prices get boost from US data, Draghi comments

Last updated: 15:22 26 Jul 2012 BST, First published: 19:22 26 Jul 2012 BST

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Oil prices were on the rise today with the West Texas Intermediate (WTI) benchmark in the US and London Brent adding more than US$1 per barrel after getting a boost from positive US data and reissuing comments from European Central Bank (ECB) president Mario Draghi.

Initial claims for unemployment benefits dipped more than expected last week, sliding 35,000 to 353,000 showed a report from the Department of Labor. Analysts polled by Bloomberg News projected a smaller decline to 380,000 claims.

A separate report from the Commerce Department revealed 1.6 percent gain in orders for goods that are not expected to wear out within three years for June following a 1.3 percent gain in May.

However, the data was taken with a grain of salt as orders excluding transportations dropped 1.1 percent, marking the biggest monthly drop since January.

In Europe, ECB president Draghi said the central bank will do all in its powers to prevent the euro zone from breaking up.

“Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough,” Draghi said at the Global Investment Conference in London, adding that the euro was irreversible.

Yesterday’s inventories data was bearish for oil, showing that America’s crude oil stocks added a massive 2.7 million barrels last week compared with expectations of a small decline.

US light, sweet crude for September delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), rallied US$1.04 to US$90.01/barrel this afternoon.

September Brent crude surged US$1.26 to US$105.64/barrel on the ICE Exchange.

Today’s top risers in the oil and gas sector were:

Fastnet Oil & Gas (LON:FAST), up 15 percent at 16.4 pence at midday

Trap Oil (LON:TRAP), up 11.5 percent at 17.97 pence

Amerisur Resources (LON:AMER), up 11 percent at 42.5 pence

Mediterranean Oil & Gas (LON:MOG), up 7 percent at 11.12 pence

Silvermere Energy (LON:SLME), up 6.5 percent at 10.4 pence

The top fallers were:

Oilex (LON:OEX), down 17.5 percent at 4.64 pence at midday

Cadogan Petroleum (LON:CAD), down 5 percent at 17.9 pence

Egdon Resources (LON:EDR), down 3.5 percent at 8.05 pence

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