WASHINGTON, D.C. (DTN) -- New York Mercantile Exchange oil futures settled slightly higher Thursday afternoon after seesawing in early trade as the U.S. dollar index slid to a one-month low.
The greenback tumbled a day after the Federal Reserve said it would hold off on raising the federal funds rate while signaling that the pace of rate hikes would be slower than investors expected. The euro rose versus the dollar on hopes for a last-minute deal to avert a possible Greek exit from the regional economic block.
European leaders today announced they will hold a summit to try to resolve the Greek debt crisis Monday. There has been little progress in the negotiations between Greece and its creditors, but Greek Finance Minister Yanis Varoufakis said the two sides are close enough to a deal after Athens made a new credible offer to creditors.
“Yellen gave the market a boost and most of the focus Thursday has been on Greece because of its impact on demand, but the comment by Varoufakis is supportive,” said Phil Flynn, an analyst at Price Futures Group. “Going forward, we’ll be looking at the weekly U.S. rig count data due tomorrow.”
Oil futures were also supported by the Energy Information Administration’s midweek report that showed total crude oil stocks declined 2.7 million bbl during the week ended June 12, surpassing an expected 1.8 million bbl draw and the seventh consecutive weekly stock draw.
The EIA report also showed U.S. production decreased by 20,000 bpd in the week-ended June 12 to 9.59 million bpd, yet was still at a more than four-decade high, while up 1.11 million bpd versus a year ago.
At settlement, NYMEX July WTI crude futures were up 53 cents at $60.45 bbl after inside trade. The ICE August Brent contract settled 39 cents higher at $64.26 bbl after inside trade.
In products trade, NYMEX July ULSD futures settled up 0.54 cents at $1.9152 bbl while NYMEX July RBOB futures settled 0.96 cents higher at $2.1101 gallon after inside trade.
On Wall Street, U.S. equities rallied more than 1.0% on the Fed comments and fresh economic data showing higher inflation and an improving labor market. The Fed on Wednesday kept the federal funds rate target in a current zero to 0.25% range, and said the decision to raise rates will data dependent.
Thursday, the Bureau of Labor Statistics said the Consumer Price Index, a key measure of inflation, climbed 0.4% in May, the fourth consecutive monthly increase and the highest monthly gain since 2013. The inflation gain was boosted by a 10.4% spike in gasoline prices.
In addition, the Labor Department said weekly jobless claims fell 12,000 to 267,000. The market expected a smaller decline of 4,000 to 275,000, so the latest data for the week ended June 13 was viewed as bullish, suggesting fewer job layoffs and higher retention rates.
Also, Philadelphia Federal Reserve Bank’s regional manufacturing index jumped to 15.2 points in May from 6.7 in April, the biggest increase in six months, suggesting that an improving economy is boosting factory output in the area covering Delaware, Philadelphia, and southern New Jersey.
George Orwel can be reached at email@example.com
© Copyright 2015 DTN/The Progressive Farmer. All rights reserved.