Oil prices rise on US jobless claims data

28th July 2011, Comments 0 comments

World oil prices rose on Thursday, extending earlier gains, as better-than-expected US jobless claims data helped dispel worries about the ongoing debt-ceiling row in Washington, traders said.

New York's main contract, light sweet crude for delivery in September, gained 18 cents to $97.58 a barrel.

Brent North Sea crude for September climbed 80 cents to $118.23 in late afternoon deals in London.

The US Labor Department announced on Thursday that new claims for unemployment benefits fell to 398,000 last week.

That was the lowest level in nearly four months and the first time they had fallen below 400,000 since early April.

The data lifted market sentiment because the United States is the world's biggest consumer of oil.

Crude futures also rose as US lawmakers scrambled for a compromise to avert a devastating debt default for the world's biggest economy, analysts said.

A drawn-out political impasse in the United States, as polarised politicians struggle to find a middle ground over a debt solution, has exacted its toll on traders.

"Some market talk that a deal on the US debt ceiling may be hammered out had offered some better (oil price) sentiment but there is no confirmation yet," said Sucden analyst Brenda Sullivan.

Republican lawmakers Thursday pressed ahead with a vote on a plan to avert a calamitous US debt default, ignoring White House warnings of a veto as the political wrangling infected global markets.

Republican House Speaker John Boehner was to put his two-step plan to raise the nation's $14.3 trillion debt limit to the House of Representatives, even though a majority of senators have vowed to block it in the Senate.

With only five days to go before an August 2 deadline when the world's richest nation says it will no longer be able to borrow funds to pay its bills, Democrats and Republicans dug in, although there were hints of intense behind-the-scenes negotiations.


© 2011 AFP

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