NYMEX May crude futures settled 94 cents higher to $103.64/barrel after New York trading Thursday, pushed higher on the possibility of further stimulus measures by the US Federal Reserve.
NYMEX May RBOB futures led the petroleum complex throughout the day, gaining 6.12 cents to $3.3567/gallon on follow-through buying from Wednesday's US government report that showed a higher-than-expected draw in gasoline stocks last week.
May heating oil rose 5.14 cents to $3.1663/gal, while ICE Brent May Crude gained $1.53 to settle at $121.71/b.
"It is a 'bad-is-good' scenario," said Matt Smith, commodity analyst at Summit Energy, citing an unexpected rise in US initial claims for unemployment last week of 13,000 to 380,000 claims, and comments from US Fed Vice Chairman Janet Yellen that the Fed is looking to keep costs low through 2014.
"That brought the impetus back that things are not as good as they seem and that loose monetary policy will stay in place with a potential for QE3 (quantitative easing), which rallied oil," Smith said.
Carl Larry of Oil Outlooks and Opinions made note of the Saudi output increase of 100,000 b/d, pushing the total over 10 million b/d.
"We're not in a period of high demand here, so there's not a lot of spare capacity ... the imports to the [US Gulf of Mexico] have dropped off, so we're not getting anymore here. So when we need [more barrels], where are they going to come from?" Larry said.
The geopolitical risk premium ticked up slightly Thursday with Iranian President Mahmoud Ahmadinejad employing bellicose language ahead of this weekend's meeting with the so-called P5+1 powers -- permanent UN Security Council members Britain, China, France, Russia and the US plus Germany.
"The Iranian nation is standing firm on its fundamental rights and under the harshest pressure will not retreat an iota from its undeniable right," Ahmadinejad said.
"On behalf of the Iranian nation, I advise the enemies and the arrogance (the United States) to change their behavior towards our nation, and they should know that the Iranians are standing firm in defending their rights," he said.
