NEW YORK: Oil prices rallied sharply on Thursday after two days of losses as news of deeper industry spending cuts and a sinking U.S. dollar revived buying.
U.S. crude closed above $51 a barrel, shaking off a morning dip tied to data showing a potentially record rise in stockpiles at the Cushing, Oklahoma, delivery hub.
Its discount versus Brent crude expanded to around $6.84 a barrel
French energy major Total
"Shell's CEO had a more bullish take on supply and demand and the weaker dollar also helped support crude," said Phil Flynn, analyst at Price Futures Group in Chicago.
Expiring March Brent futures
Gains were fueled in part by the weaker U.S. dollar, with the dollar index <.DXY> falling nearly 1 percent after reports showing U.S. retail sales fell 0.8 percent last month and weekly jobless claims rose above 300,000. [FRX/]
U.S. March crude futures
Traders remain split over whether the market has found a floor after rebounding from a post-2009 low near $45 a month ago. Many see the market currently oversupplied by up to 2 million barrels per day.
Volatility has jumped to its highest since the financial crisis, jolting traders who had been adjusting to a period of predictable declines. The oil VIX index <.OVX> dipped to 58 on Thursday, down from a six-year high above 63.
The latest jolt came at mid-morning on Thursday after oil intelligence firm Genscape reported that crude oil inventories in Cushing, Oklahoma, rose by more than 3 million barrels in the four days to Feb. 10, suggesting government data next week may show the biggest ever weekly build.
U.S. March ultra-low sulfur diesel
Already a subscriber? Log in.
Limited time offer:
Cancel anytime. No ads. Auto-renewal. Unlimited access to the web and app. Personalised features. Members rewards.
Follow us on our official WhatsApp channel for breaking news alerts and key updates!