By Peter Nurse
Investing.com -- Crude oil prices traded higher Thursday, overturning early losses, helped by signs of a strengthening U.S. economy and following news of a drop in supply from OPEC-member Libya.
By 9:10 AM ET (1410 GMT), U.S. crude futures traded 0.6% higher at $61.71 a barrel, while the international benchmark Brent contract rose 0.6% to $65.69. Both contracts dropped more than 2% on Wednesday, closing at their lowest since April 13, and had traded lower again earlier Thursday.
U.S. Gasoline RBOB Futures rose 0.6% at $1.9945 a gallon.
Weekly data earlier Thursday pointed to fewer Americans filing new claims for unemployment benefits last week, with 547,000 claims for the week ended April 17 compared with 586,000 in the prior week.
This was the second straight week that claims were below the 700,000 level since March 2020, when the first wave of Covid-19 infections caused many businesses to shut down, and points to another month of strong job growth in April.
Adding to the positive sentiment was the news that Libya's oil production fell to about 1 million barrels per day in recent days, from around 1.3 million barrels, and could drop further due to budgetary issues, the country’s National Oil Corporation said Thursday.
Libya is a member of the Organization of Petroleum Exporting Countries, a cartel which has been limiting the supply of oil into the global market to prop up prices during the Covid-induced slowdown. However, due to a civil war, the North African country is exempt from these cuts and has been supplying more oil to the wider market than several of its OPEC peers.
OPEC and its allies, including Russia, a grouping known as OPEC+, are scheduled to meet next week, although the group has already decided on output policy through until the end of July and so ministers may see little reason to hold the full ministerial meeting.
The crude market had started the day under pressure as a surprise build in U.S. crude inventories on Wednesday and a resurgence of Covid-19 cases in India and Japan raised concerns that a recovery in the global economy and fuel demand may slow.
While a U.S. recovery should result in the country’s crude stocks being drawn down over time, the Covid situation in India, in particular, remains troublesome.
India recorded the world's highest daily tally of 314,835 new infections on Thursday as a second wave of the pandemic raised new fears about the ability of the country’s health services to cope.