BUSINESS

Oil shoots higher on U.S. unemployment claims, Spain budget, hope for China

09/27/2012 05:26 EDT | Updated 11/27/2012 05:12 EST
NEW YORK, N.Y. - The price of oil gained almost US$2 per barrel Thursday after three straight days of declines.

A positive report on the U.S. job market, signs that Spain can meet its deficit-cutting targets and hope the central bank of China will act soon to help that country's economy contributed to oil's biggest gain in nearly two months.

Benchmark oil gained $1.87, or 2.1 per cent, to finish at $91.85 per barrel on the New York Mercantile Exchange. The last time crude posted a bigger gain was Aug. 3.

The U.S. Labour Department said the number of Americans seeking unemployment benefits plunged 26,000 last week to a seasonally adjusted 359,000, the lowest level in nine weeks. Any sign of an improving U.S. economy can drive energy prices higher.

Oil's gains started earlier in Asia, helped by expectations the People's Bank of China will soon take more steps to stimulate the world's No. 2 economy. Spain later announced severe budget cuts intended to convince the world that it can meet deficit-reduction targets.

U.S. stock markets also enjoyed their best day of the week.

Before Thursday's decline, oil prices had dropped $9 per barrel in the last two weeks following the announcement of new economic stimulus measures by the U.S. Federal Reserve.

Brent crude, which is used to price international varieties of oil, gained $1.97 to close at $112.01 on the ICE Futures Exchange in London.

In other Nymex trading:

— Heating oil rose 5.1 cents to close at $3.157 per gallon.

— Wholesale gasoline gained 6.3 cents to finish at $3.14 per gallon.

— Natural gas added 8.2 cents to end at $3.297 per 1,000 cubic feet, a high for the year.

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