Oil futures accelerated a bullish climb shortly ahead of the 2:30 p.m. EDT (1830 GMT) NYMEX market settle to close Thursday sharply higher amid rising equities and a weaker dollar.
ICE July Brent expired up 76 cents at $104.25/b, after ranging between $102.75/b and $104.26/b throughout the session. The August contract jumped a more substantial $1.39/b to settle at $104.95/b.
NYMEX July crude closed the session up 81 cents at $96.69/b, after lifting as high as $96.92/b within the last 10 minutes of trading. The front-month contract spent most of early trade hovering below Wednesday's settles before strengthening into the afternoon as US equities markets reversed an early decline to push sharply higher.
"In general, we continue to see a willingness on the part of investors to buy on the back of the US economic growth story and any move higher in equities or US dollar swings," Citi Futures Perspective analyst Tim Evans said in a note.
US equities markets climbed throughout the afternoon, contrasting with the selloffs seen across much of Asia overnight and the mixed performance out of Europe. At 2:30 p.m. EDT, the Dow Jones Industrial Average was up 0.81% at 15,116.4, while the S&P 500 was 0.99% higher at 1,628.50.
"Today's jobless claims and retail sales numbers leant a bit of support after markets overnight just absolutely tanked," Schneider Electric commodities analyst Matt Smith said. "Crude doesn't want to move lower at the moment, and even given yesterday's [US Energy Information Administration weekly inventory] report, we didn't see any selloff."
The US Census Bureau released its advance monthly sales report ahead of the US market open, showing a 0.6% month-on-month increase in May. The Bureau of Labor Statistics also released fresh jobless data, showing a 12,000 claim decrease in initial jobless claims over the week ended June 8 to 334,000. Continuing jobless claims increased by 2,000 to 2.973 million.
"Every morning we talk about how the Asian markets are skittish about the eventual end of quantitative easing in all of its many forms," Tradition Energy analyst Addison Armstrong said. "That has certainly been the theme in the equities markets. But the US is really off on a little island by itself."
Japan's Nikkei 225 fell more than 6% Thursday, hitting levels not seen since April, while the yen continued to strengthen substantially against the US dollar.
At 2:30 p.m. EDT, the US Dollar Index was down 0.21% at 80.777, largely due to the firmer yen. The Dollar Index bottomed out at a four-month low of 80.500, helping to contribute to the bounce in crude prices.
Additional geopolitical developments were also helping to fuel bullish market sentiment across the Brent complex relative to NYMEX crude.
"Looks like supply could be impacted by maintenance in the North Sea this summer, and concerns are growing about what's going on in Turkey given the amount of oil that flows through the Bosphorus [Straits]," Armstrong added. "Moreover, news came out today that Libya is producing less than 1 million barrels/day due to sabotage... then you still have Syria in the background and [Friday's] Iranian [presidential] elections."
An explosion and fire was reported at a Sudanese oil pipeline in the disputed Abyei area, according to a report by AFP. Sudan's army placed the blame on South Sudanese-backed rebels.
Product markets also pushed higher, as Thursday's retail sales number added to bullish sentiment about future product demand. NYMEX July RBOB closed the trading session up 5.12 cents at $2.8613/gal, after bouncing off of a three-day high of $2.8681/gal. NYMEX July ULSD closed up 4.43 cents at $2.9395/gal, while ICE July gasoil was up $13.50/mt at $886.50/mt at 2:30 p.m. EDT.
