Oil prices inched closer to $100 a barrel today, supported by a fall in applications for unemployment benefits and expectations of a decline in U.S. crude stockpiles.
By early afternoon in Europe, benchmark U.S. oil for February delivery was up 12 cents to $99.67 in electronic trading on the New York Mercantile Exchange. On Thursday, the Nymex contract added 33 cents to close at $99.55 a barrel.
Oil prices gained nearly 3 percent last week as optimism about the U.S. economic recovery lifted expectations for the country’s energy demand.
That optimism was also sustained by Thursday’s data from the Labor Department, which said that the number of Americans applying for unemployment benefits dropped by 42,000 last week to a seasonally adjusted 338,000, the biggest fall since November 2012.
Even though that was a better figure than expected, economists noted that data from late November and December is warped by seasonal volatility due to the holidays.
Traders are also awaiting last week’s data on U.S. crude stockpiles. Data for the week ending Dec. 20 is expected to show a draw of 2.3 million barrels in crude oil stocks and a build of 1.2 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
On Tuesday, the industry-funded American Petroleum Institute said crude stocks added 760,000 barrels, while the report from the Energy Department’s Energy Information Administration — the market benchmark — will be out later today, delayed two days because of the holidays.
Meanwhile, violence in South Sudan has stoked concerns about the African nation’s oil production.
Worries over instability in South Sudan have led some analysts to predict the contract may top $100 a barrel for the first time since mid-October.
“Violence flaring in South Sudan threatens to disrupt crude output in the region and with ongoing outages in Libya, Brent prices may gain further support from a tightening fundamental outlook,” said analysts in a note from Sucden Financial Research.
Brent crude, a benchmark for international oils, was down 2 cent at $111.96 a barrel on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
— Wholesale gasoline was down 1.04 cents to $2.8045 a gallon.
— Heating oil was down 0.46 cent to $3.071 per gallon.
— Natural gas lost 5.4 cents to $4.379 per 1,000 cubic feet.