Crude Oil Surges To End Above $108

(RTTNews) - U.S. crude oil soared to end at a one-year high Thursday, tracking rising global equity markets on some better-than-expected initial job claims data from the U.S., following a more-than-expected drop in weekly crude oil inventories yesterday. Investors also speculated on the Federal Reserve Chairman Ben Bernanke's statement before the Senate Banking Committee that there was no set time line to start tapering down the Fed's quantitative easing program.

After a notable increase in first-time claims for U.S. unemployment benefits in the previous week, a Labor Department report on Thursday showed initial jobless claims pulled back more than expected in the week ended July 13.

Light Sweet Crude Oil futures for August delivery, the most actively traded contract, soared $1.56 or 1.5 percent to close at $108.04 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for August delivery scaled a high of $108.43 a barrel intraday and a low of $106.15.

Yesterday, oil settled higher ended higher Wednesday, after an official Energy Information Administration weekly report showed U.S. crude inventories to have dropped more than expected last week.

The EIA on Wednesday said U.S. crude oil inventories moved down for a third week in a row, shedding 6.90 million barrels, while gasoline stocks were up 3.10 million barrels in the weekended July 12. Analysts expected crude oil stocks to shed 2.5 million barrels, with gasoline stocks little changed.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.85 on Thursday, up from 82.69 late Wednesday in North American trade. The dollar scaled a high of 83.03 intraday and a low of 82.62.

The euro traded lower against the dollar at $1.3105 on Thursday, as compared to $1.3125 late Wednesday in North America. The euro scaled a high of $1.3127 intraday and a low of $1.3068.

In economic news from the U.S., the Labor Department said initial jobless claim fell to 334,000 in the week ended July 13, a decrease of 24,000 from the previous week's revised figure of 358,000. Economists had been expecting jobless claims to dip to 345,000 from the 360,000 originally reported for the previous week.

With leading U.S. economic indicators turning in a mixed performance in June, the Conference Board released a report on Thursday showing that its leading economic index came in unchanged for the month. The Conference Board said its leading economic index was flat in June after edging up by 0.2 percent in May and jumping by 0.8 percent in April. Economists expected the index to rise by 0.3 percent.

Philadelphia-area manufacturers reported increased business activity in July, a report from the Federal Reserve Bank of Philadelphia showed Thursday, with the index of regional manufacturing activity reaching a two-year high. The Philly Fed's diffusion index of current activity surged up to 19.8 in July from 12.5 in June, with a positive reading indicating an increase in regional manufacturing activity. Economists expected the index to drop to a reading of 9.0. This is the highest level the index has reached since jumping to 36.1 in March 2011.

Elsewhere, eurozone current account surplus decreased in May from the previous month, due mainly to higher deficit in current transfers and a decline in revenues, the European Central Bank said. The seasonally adjusted current account surplus dropped to 19.6 billion euros in May from an upwardly revised 23.8 billion euros in April. In March, the balance was a surplus of 23.1 billion euros.

U.K. retail sales volume, both excluding and including auto fuel, grew 0.2 percent each month-on-month in June, data from the Office for National Statistics showed. Economists had forecast sales including auto fuel to grow 0.3 percent following a 2.1 percent rise in May. Sales, excluding auto fuel grew in line with economists' expectations, after expanding 2.1 percent a month ago.

Meanwhile, the Federal Reserve Chairman Ben Bernanke concluding his testimony before lawmakers in Washington, said central bank intends to maintain its highly accommodative policy for the foreseeable future. Speaking to the Senate Banking Committee, Bernanke said inflation remains in check, allowing the Fed to keep unprecedented support measures in place until the unemployment rate significantly improves.

"It is way too early to make judgment on whether the Fed will slow down asset purchases at its September meeting," Bernanke said. Market experts have targeted the September meeting for a possible tapering back of the quantitative easing plan.