WASHINGTON (DTN) -- Oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange held mostly higher in early trade Thursday, with front-month West Texas Intermediate contract gaining as much as 8% after U.S. Senate passed a massive relief package to cushion the domestic economy against coronavirus-lead recession and Russia indicated it prefers higher oil prices, hinting at potential cooperation with partners from Organization of the Petroleum Exporting Countries.
In early trading, NYMEX April WTI futures rallied $1.67 to $22.04 per barrel (bbl), with next-month delivery May contract expanding its premium to $0.48 bbl. ICE May Brent was up $0.69 or 2.7% at $25.59 bbl. NYMEX April ULSD futures climbed 0.73 cents to near $0.9615 gallon, reversing off a $0.9343 48-month low on the spot continuous chart. Front-month NYMEX RBOB contract was 0.67 cents lower at $0.6310 gallon, a fresh 18-year low.
The U.S. dollar pared gains from a 102.920 38-month high after U.S. Labor Department reported jobless claims in the United States increased 70,000 during the week ended March 14 to 281,000, well above consensus for 220,000 filings, with the size of the increase in people seeking unemployment insurance increasing at a faster pace than expected. Jobless claims are expected to accelerate in the coming weeks as people movement becomes even more constrained amid efforts to slow the spread of coronavirus.
There are now more than 7,000 confirmed cases in the United States, and at least 141 people have died.
WTI and Brent advanced Thursday after U.S. President Donald Trump signed into law a relief package passed by the House last week and approved by the Senate Wednesday. The bill will provide for expansion in social security programs and paid sick leave as well as free medical testing. Overnight reports also indicate the White House is now solidifying plans for a third phase of the response, which would include two rounds of direct cash payments to taxpayers.
U.S. stock indexes once again point to a lower open on Thursday, extending their recent slide into week's end. Dow Jones Industrials closed below 20,000 for the first time since 2017 on Wednesday.
Markets were able, however, to find some support in overnight activity after the European Central Bank launched an $820 billion bond-buying program that will last until at least the end of the year.
Oil futures also found some support in comments from Russian officials indicating oil prices are too low for sustainable growth of the country's oil industry.
"Of course it's a low price, we would like to see it higher," Kremlin spokesman Dmitry Peskov said on a conference call, signaling for the first time that the country's tolerance of low prices may be wearing thin. "We're very closely monitoring the situation on global oil markets, trying to make forecasts for the near- and mid-term future. Russia will form its position on any potential new cooperation with OPEC depending on the outcome of the analysis," he added.
Iraq, OPEC's second-largest producer, on Tuesday urged the group and its partners to hold a fresh round of talks to address the developing crisis. Yet Saudi Arabia on Wednesday said it would pump about 12.3 million bpd over the coming months, while Russia's oil companies have insisted their low production costs would allow them to keep pumping even if prices move toward $10 bbl.
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