NEW YORK: Oil futures rose on both sides of the Atlantic yesterday as bullish US economic data and a drawdown in US crude inventories implied increasing use in the world’s biggest oil consumer.
Gains were limited by concerns that the strong economic indicators could move the Federal Reserve closer to unwinding its massive stimulus program that has boosted commodities prices.
Brent held above $115 early on the session as investors worried that supply disruptions could persist in the Middle East after US lawmakers supported a military strike on Syria.
Brent and US crude gave back some gains after strong US economic data on the service sector and employment data suggested that the world’s biggest economy could be strong enough to withstand a winding down of stimulus by the Federal Reserve, but reversed course and remained buoyant later in the session.
The Institute for Supply Management reported that the pace of growth in the US services sector accelerated in August to its fastest in almost eight years. The US Labour Department said private employers added 176,000 jobs in August, while new jobless claims last week fell to a near five-year low.
US crude prices also drew support from separate data showing US crude stocks fell by 1.84m barrels, including a 1.83m barrel draw at Cushing, Oklahoma, which is the delivery point for US crude futures.
Brent crude rose 13 cents to $115.04 a barrel by 1:24pm EDT (1724 GMT) after an earlier high of $115.55. US oil gained 81 cents to $108.04 a barrel after earlier reaching $108.54. Reuters