NYMEX September crude settled $2.83 higher at $85.72/barrel Thursday, with a reversal to the upside in US equity indexes paving the way for the second consecutive day of strong gains in oil futures.
Both the S&P 500 and the Dow Jones Industrial Average were making new intra-session highs shortly ahead of the close of open outcry in oil futures.
A late-day rebound in European bourses put a floor in US equity markets.
French President Nicolas Sarkozy called a eurozone crisis meeting with his German counterpart, Angela Merkel, while Italy promised cuts and tax hikes Thursday as its part in the battle to save the single currency, AFP reported.
Merkel will travel next Tuesday to Paris for the meeting aimed at producing "joint proposals" by September on how to better manage the euro and avoid future instability, Sarkozy's office said, according to AFP.
Deeply oversold technical conditions across multiple markets and weekly US jobless claims contributed to the rebound in US equity indexes after Wednesday's steep losses.
In the week ended August 6, the advance figure for seasonally adjusted initial claims was 395,000, a decrease of 7,000 from the previous week's revised figure of 402,000, the Department of Commerce reported. The four-week moving average was 405,000, a decrease of 3,250 from the previous week's revised average of 408,250.
"If not for the violent sell-off in global equity markets and the aforementioned downward revision to Q2 GDP, the recent trend in claims would be really encouraging," economists at Deutsche Bank, said in a report. "But we are worried that market developments could derail budding labor market improvement."
Volatility continued unabated in equities and commodities with NYMEX crude and ICE Brent swinging in a nearly $5/b and $4/b ranges, respectively.
September heating oil settled 3.39 cents higher at $2.8992/gal and September RBOB settled 4.48 cents higher at $2.8273/gal with RBOB boosted by news of a downed fluid catalytic cracker at Irving's 300,000 b/d New Brunswick refinery.
