NEW YORK (DTN) -- New York Mercantile Exchange oil futures moved higher Thursday morning ahead of the Energy Information Administration's weekly oil supply data due out at 10 a.m. CT.
The futures complex extended the prior session's gains after Iraq and Iran cautiously supported a plan by Saudi Arabia and Russia to freeze their oil production at January levels while the American Petroleum Institute reported domestic crude oil stockpiles were unexpectedly drawn down last week.
Talk of production freeze by these major oil producers partly offset a weaker economic outlook by the Organization for Economic Cooperation and Development.
At last look, NYMEX March West Texas Intermediate crude futures surged 99 cents or 3.2% to $31.65 barrel, off a near two-week high of $31.98. April Brent crude oil futures on the IntercontinentalExchange advanced $1.01 or 2.9% to $35.51 bbl.
In products trade, the NYMEX March ULSD futures contract rose 2.09 cents to $1.1088 gallon, off a near two-week high of $1.1155. The March RBOB futures contract edged up fractionally to $1.0046 gallon after inside trade.
On Wall Street, U.S. stock indices moved higher, with the dollar index also up versus its peer currencies. It comes as the Labor Department said initial jobless claims fell 7,000 to 262,000 in the week ended Feb. 13, the lowest level since the last week of November and a sign of a healthy labor market.
Also, the OECD trimmed its outlook for global growth in 2016 and 2017 due to slowing economies in the United States, Brazil and Germany.
OECD said world gross domestic product would grow at a 3.0% rate in 2016 and 3.3% in 2017, both down by 0.3% from their November outlook. The U.S. would grow 2% in 2016 and 2.2% in 2017, OECD said, down from previous forecasts for 2.5% and 2.4%, respectively.
Oil traders continue to focus on oil supply. The American Petroleum Institute reported U.S. crude oil inventories dropped 3.3 million bbl during the week-ended Feb. 12, missing a forecast for a 3.0 million bbl increase.
API reported gasoline stockpiles rose by 800,000 bbl, shy of estimates for a 1.0 million bbl build, while distillates stockpiles fell 2.0 million bbl, above calls for draw of 1.5 million bbl.
The Wall Street Journal reported that Iraq and Iran supported ongoing talks between Russia and the Organization of the Petroleum Exporting Countries to stabilize oil prices.
The market has been waiting to hear whether the two OPEC members would agree to limit output after Qatar, Saudi Arabia, Russia, Kuwait and Venezuela earlier this week agreed to freeze their oil output at January levels. That agreement was contingent on whether Iran and Iraq would follow.
Iran on Wednesday expressed support for the output freeze and Iraq followed suit today, welcoming the deal although both countries didn't make firm commitments that they will join in the freeze. Iran previously said it will have to wait until its production reaches pre-sanctions level before joining any efforts to trim output.
George Orwel can be reached at email@example.com
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