Oil futures have been suffering, following trends in the market this past week as it dipped amid fears that U.S. economic recovery was faltering and worries about the debt crisis in Europe.
On Thursday, however, the slipping numbers did a turnaround as the government announced a drop in jobless claims for the week ending August 6.
Though economists surveyed by Bloomberg expected rates to be at 405,000 and those surveyed by the Wall Street Journal’s “Market Watch” expected the number to be 410,000, claims actually dipped below 400,000.
For last week, jobless claims dropped 7,000 to 395,000. Economists have expressed that numbers below 400,000 would be considered an indication of job growth.
And on this report, stocks rose and oil futures followed suit, sending up the price of crude.
At 2:28pm on Thursday, the price of light, sweet crude for September delivery was up 3.43% to $85.73.
According to Bloomberg, Brent crude on the London-based ICE Futures was up 21 cents to $106.89 a barrel.
Oil stockpiles in the United States unexpectedly declined on Wednesday, indicating that demand had risen higher than expected.
Demand for oil had been down in the U.S. this summer, a daunting statistic for the peak consumption season in the largest oil-consuming nation. Oil was down between 13% and 14% last month.
If people aren’t consuming oil as quickly as expected, it indicates that the economic recovery is not at a healthy point.
And this was certainly the case as unemployment numbers had lacked much change.
But a drop in these numbers sent up equities for the day. In midday trading, the S&P 500 was up 3.8%, and the Dow Jones was up 3.3%.
As had happened with the drop in stocks, oil followed the trends.
U.S. jobless claims are at the lowest rate since April, says Bloomberg, and this could indicate a recovery.
Crude for September delivery hit a daily low of $81.03 and a high of $85.98 on Thursday.
That’s all for now,