NEW YORK (Reuters) – Oil entered Thursday on strong U.S. economic data, falling investments and OPEC + ’s decision to stick to its yield cuts, but a stronger U.S. dollar limited the gains.
Brent crude settled at $ 58.84 a barrel, up 38 cents, after hitting its highest level since Feb. 21 at $ 59.04.
US West Texas Intermediate (WTI) crude settled at $ 54 per barrel, rising 54 cents after reaching its highest settlement rate in a year Wednesday at $ 55.69.
Strong U.S. factory data and the development of unemployment numbers helped raise oil prices, said John Kilduff, a partner at New Capital Again in New York.
“That helped, and with the wider situation with OPEC +, I would expect this market to tighten further,” said Kilduff.
The U.S. Department of Commerce said factory orders rose 1.1% after exceeding 1.3% in November, beating economists’ expectations, while Labor Department data showed a fall in Americans file new claims for unemployment benefits in recent week. Investors also expected to receive positive data from the government’s upcoming full monthly recruitment report on Friday.
The market was further strengthened by news that Democrats in the U.S. Congress took the first steps toward advancing a $ 1.9 trillion coronavirus support plan proposed by President Joe Biden.
The U.S. dollar rally, which usually moves against oil prices, brought some of the steam out of the oil movement. The dollar hit a more than two-month high against a basket of other currencies.
On Wednesday, the Organization of the Petroleum Exporting Countries (OPEC) and allies – known as OPEC + – extended their oil supply agreement at current levels, suggesting that producers are pleased that the cuts are ‘drains investments while uncertainty remains above expectations for recovery in demand as COVID-19 pandemics escalate.
A document seen by Reuters on Tuesday showed that OPEC expects product cuts to keep the market in deficit throughout 2021, even as the agency lowered the forecast on demand.
Also on Wednesday, government data showed U.S. crude oil stocks fell last week to 475.7 million barrels, their lowest level since March.
Additional commentary by Julia Payne and Jessica Jaganathan; Edited by Marguerita Choy, Kirsten Donovan and Paul Simao