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Oil prices bounce on positive US data

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Oil prices bounced back this afternoon as the outlook for the job market recovery in the US brightened after the US Labor Department said that jobless claims finally plunged below the psychologically significant 400,000 level last week.

Today’s jobs report showed that the initial applications for unemployment benefits declined 24,000 to 398,000 in the week to 24 July, which was a bigger decline than expected by analysts.

The National Association of Retailers provided more good news for investors today, reporting an unexpected 2.4 percent gain in its existing home sales index for June following an 8.2 percent gain in May.

The jobs and housing data offset the negative impact from a surprise gain of 2.3 million barrels in US crude oil inventories reported by the US Department of Energy yesterday.

Any economic updates coming out in the US directly impact commodity prices as the US is the world’s largest energy consumer.

Early in the session, crude prices were supported by bargain hunting that followed yesterday’s sell-off on US debt jitters.

The US debt impasse has been weighing on oil prices for the better part of the month. With just five days to go until the 2 August deadline, US lawmakers are yet to agree on a budget cut deal that will allow them to raise the country’s borrowing limit.

US light, sweet crude
for September delivery climbed 25 cents to US$97.65/barrel on the New York Mercantile Exchange (NYMEX) this morning.

September Brent crude rose 39 cents to US$117.89/barrel on the ICE Exchange this afternoon.

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

Frontera Resources (LON:FRR), up 15 percent at 91.69 pence at midday

Petrel Resources (LON:PET), up 14 percent at 3.85 pence

Sefton Resources (LON:SER), up 10 percent at 15.7 pence

Sound Oil (LON:SOU)
, up 7.5 percent at 2.58 pence

Melrose Resources (LON:MRS)
, up 5 percent at 203.25 pence

The top fallers were:

Woburn Energy (LON:WBN), down 11 percent at 2 pence at midday

BowLeven (LON:BLVN), down 8 percent at 260.75 pence

Roxi Petroleum (LON:RXP), down 3.58 pence

Leed Petroleum (LON:LDP), down 6.5 percent at 0.117 pence

Global Petroleum (LON:GBP), down 6.5 percent at 16.25 pence

Quick facts: Brent Crude Oil

Price: - -

LSE:BRENT
Market: LSE
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