Oil above $105 on Draghi pledge, U.S. data

MARKETS-OIL:Oil above $105 on Draghi pledge, U.S. data

new York  July 26, 2012, 21:48 IST

new York  07 26, 2012, 21:50 IST

 

Oil futures rose for a third straight day on Thursday, with Brent above $105 a barrel, after Europe's central bank pledged it would protect the euro zone from collapse, while U.S. data showed jobless claims fell last week.

The upbeat developments trumped worries about slowing global growth and the euro zone debt crisis.

European Central Bank chief Mario Draghi, speaking at a conference in London, delivered a strong signal to do whatever was necessary to preserve the euro zone, including fighting unreasonably high government borrowing costs.

The euro rallied against the dollar and major currencies on Draghi's comments, encouraging investors in dollar-denominated commodities such as oil and copper to buy in.

"The comments by Draghi are likely to bring that confidence back," said Eugen Weinberg, head of commodities research at Commerzbank.

In London, September Brent crude was up 68 cents at $105.06 a barrel by 11:05 a.m. EDT (1505 GMT), after hitting a session high of $106.18.

U.S. September crude traded up 45 cents at $89.42, having risen earlier to a session high of $90.47.

New U.S. claims for jobless benefits fell last week by 35,000 to a seasonally adjusted 353,000, near a four-year low, the U.S. Labor Deparment said. It was a much bigger drop than economists had expected.

Another set of data showed overall orders for long-lasting U.S. manufactured goods rose more than expected in June. However, excluding transportation, durable goods orders dropped 1.1 percent, the biggest decline since January.

A third report showed U.S. pending home sales fell in June as fewer properties came on the market, according to an industry group, pointng to weak home resales in July.

Expectations that the U.S. Federal Reserve would add more stimulus to shore up the slowing economic recovery after a series of recent downbeat data have remained supportive for oil futures, traders said.