Oil prices edged higher Thursday, buoyed by a bigger-than-expected drop in U.S. crude stockpiles, but weaker than expected U.S. labor market data resulted in a paring of these gains.
As of 09:05 ET (13:05 GMT), Brent Oil Futures expiring in October rose 0.3% to $67.07 per barrel, while West Texas Intermediate (WTI) crude futures climbed 0.3% to $62.88 per barrel.
U.S. jobless claims rise
The number of Americans filing for first-time unemployment benefits rose more than expected last week, pointing to a further weakening of the country’s labor market amid tariff-fueled economic uncertainty.
Seasonally-adjusted U.S. jobless claims climbed to 235,000 in the week ended on August 16, up from 224,000 in the prior week. Economists had predicted a reading of 226,000.
This release has added to recent evidence of a cooling labor market as companies grapple with uncertainty around Trump’s tariff policies.
The July jobs report, released at the start of this month, showed far fewer jobs than expected were created in that month, a rise in the unemployment rate and a drop in the labor force participation rate to the lowest level since late 2022.
Further signs of U.S. economic weakness will weigh on sentiment, given the U.S. economy is the largest consumer of crude in the world.
US crude stockpiles drop more than expected - EIA
The crude market had surged on Wednesday, carrying the positive tone into Thursday’s session, after the U.S. Energy Information Administration’s (EIA) weekly report.
It showed a much sharper-than-expected draw in crude inventories, with stockpiles falling by about 6 million barrels versus forecasts for a 1.8 million-barrel decline.
The decline, driven by a surge in exports and steady refinery runs, signalled tightening supply and robust demand, which provided a clear boost to oil market sentiment.
Gasoline inventories also fell more than expected, down 2.7 million barrels, highlighting strong summer driving demand. Refinery utilization climbed to 96.6%, underlining strong processing activity.
Traders viewed the deep inventory draw and firm product demand as confirmation that U.S. fuel consumption remains resilient, helping offset some concerns about global economic uncertainty.
Earlier this week, the American Petroleum Institute also reported that U.S. crude oil stocks fell by 2.4 million barrels in the week ending August 15.
Traders await potential Russia-Ukraine talks
President Donald Trump said on Tuesday that he spoke with Russian President Vladimir Putin after hosting Ukrainian President Volodymyr Zelenskiy and European leaders at the White House on Monday.
Trump has said that he was arranging a meeting between Moscow and Kyiv, followed by a potential trilateral summit involving the United States.
Traders are watching closely for any sign that a peace framework could lead to easing of Western sanctions on Russian crude exports.
Russia remains one of the world’s top oil suppliers, but sanctions have capped some flows into Western markets since the invasion of Ukraine.
Source :
https://www.investing.com/news/commodities-news/oil-prices-extend-sharp-gains-on-us-inventory-decline-4203384
