DTN Oil

WASHINGTON (DTN) -- Reversing midmorning losses, oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange chased equities higher in afternoon trade Thursday. The gains came after U.S. retail sales for March surged to a 10-month high and unemployment claims fell to their lowest point since the beginning of the coronavirus pandemic, signaling an accelerating economic recovery in a country that is the world's most voracious consumer of oil.

On Thursday, the Dow Jones Industrial Average crossed the 34,000 mark for the first time in history after breaking through 33,000 a little less than a month earlier. In April, all three major equity indices have vibrantly jettisoned any indication of their pandemic-induced slump and are on course to continue their advance over the coming months.

Thursday's economic data released by the U.S. Departments of Commerce and Labor revealed just how fast and resilient this recovery really is and for some justify the stock market's vertiginous rally over the past 12 months.

U.S. retail sales for March exploded 9.8% from the previous month to $619.1 billion -- the highest since the economy partially reopened following the spring lockdowns in May 2020. The reading firmly beat the consensus for a 5.5% increase. Spending for the month was broad-based, with the largest gains reported by general goods, motor vehicles and clothing. Notable increases also occurred in contact-sensitive food and beverage industries, up 13.4% from the previous month even though only a fourth of the U.S. population has received tier vaccine yet.

March's retail sales report may suggest consumers remain optimistic about the economy and are willing to spend, even though some economists suggest that, in coming months, an increased amount of stimulus checks will be going toward savings rather than spending.

Also on Thursday, the U.S. Department of Labor reported initial unemployment claims fell by a better-than-expected 193,000 to 576,000 during the week ended April 9. The number of initial claims last week was the lowest since the pandemic, with the previous low occurring during the week ended March 14, 2020, when there were 256,000 first-time filings.

Though nearly 7.5 million Americans remain unemployed or suffer from the partial loss of income, hopes are rising that the benefits of the recovery will spread further in the coming months to groups of people who have yet to benefit.

"The economy is about to grow much faster," Federal Reserve Chairman Jerome Powell said this week, adding that it appears that the economy is at an "inflection point."

These data bode well for gasoline demand heading into the typically busy summer driving season. Energy Information Administration said gasoline consumption climbed to a fresh eight-month high 8.944 million barrels (bbl) in the most recent week, while total products supplied to the U.S. market, a measure for demand, surged 1.092 million barrels per day (bpd) to 20.328 million bpd, nearly matching the pre-pandemic level.

On the session, NYMEX May WTI futures added 31 cents to settle at $63.46 per bbl, and the June Brent contract on ICE advanced to $66.94 per bbl. NYMEX May ULSD futures gained 89 cents to $1.8989 gallon, and May RBOB futures rallied to a better-than-one-year high of $2.0518 per gallon.

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