DTN Oil

WASHINGTON (DTN) -- Nearby delivery month oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange continued higher for the third consecutive session Thursday. The U.S. crude benchmark recouped all of the losses incurred during Monday's sell-off triggered by investor concerns that an unchecked spread of the Delta coronavirus variant across industrialized and emerging economies would lead to decelerated growth and demand weakness in the second half of the year.

On the session, NYMEX September West Texas Intermediate futures spiked $1.61 to settle at $71.91 barrel (bbl), ending near an intrasession high of $72.03 bbl, and the international crude benchmark Brent contract for September delivery added $1.56 for a $73.79 bbl settlement. Gains in refined products outpaced those for crude futures, with the front-month RBOB contact surging 5.65 cents or 2.5% to $2.2732 gallon and ULSD August contract rallied 4.56 cents to settle at $2.1326 gallon.

The oil complex only briefly turned negative Thursday after government data from the U.S. Department of Labor showed weekly unemployment claims unexpectedly jumped above 400,000 last week to the highest level since mid-May. Previous week's figures for both initial and continued claims were also revised higher.

An uneven recovery in the labor market comes despite a record number of job openings and the end of supplemental unemployment insurance benefits in the number of Republican-led states. For instance, Texas, Michigan, and Kentucky saw the nation's largest increases in new jobless applications last week, while New York, Tennessee and Georgia posted the largest one-week decreases.

Lackluster return to work might shed some light on stalled U.S. gasoline demand, with recent data from the Energy Information Administration showing gasoline supplied to the U.S. market little changed from the previous week at 9.2 million bpd.

Furthermore, the recent surge in COVID-19 infections shows no signs of abating in some states where vaccination rates are particularly low, including Florida, Louisiana and Missouri. Nationally, the United States is reporting a seven-day case rate of about 79 per 100,000, according to data from the Centers for Disease Control and Prevention, the highest ratio since mid-May.

Despite signs of resurgent pandemic, investors shrugged at potential tightening of quarantine restrictions for now and focused solely on the economic growth outlook.

On Friday, economic data out of the Eurozone is expected to show a marked pickup in economic activity for manufacturing and service sectors across the region amid further re-openings and pent-up demand by consumers. The European Central Bank on Thursday pledged to keep interest rates low for as long as it takes to meet its target for a balanced recovery for the 19-nation economic bloc. The ECB's main deposit facility rate is -0.5% and benchmark refinancing rate is 0%. ECB President Christine Lagarde, in her media briefing, noted that a fresh wave of the coronavirus pandemic could pose a risk to the region's recovery, although she did not provide any forecasts.

Liubov Georges can be reached at liubov.georges@dtn.com