Crude Oil Prices Pick up on Jobless, Housing Data But Stay in Range

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By Geoffrey Smith — Crude oil prices picked up a little in early trading in New York on Thursday after some reassuringly strong data from the U.S. economy, but remained essentially range-bound, with memories still fresh of Wednesday’s disappointing rise in gasoline stockpiles.

By 10:30 AM ET (1430 GMT), futures were up 1.5% at $40.61 a barrel, while futures were up 1.4% at $42.31 a barrel. Prices remain under pressure from the gradual increase in production in Libya, which is now estimated to be producing at over 500,000 barrels a day, up from barely 100,000 barrels a day in the summer. A world economy that appears to be weakening again as Covid-19 spreads rapidly in Europe and North America is ill-positioned to absorb the extra supply.

U.S. , which had slip sharply to a two-week low on the back of the Energy Information Administration’s report on Wednesday, were up 1.7% at $1.1600 a gallon. They’re still down over 11% in the last two weeks.

The EIA had reported a rise of nearly 2 million barrels in gasoline stocks last week, in stark contrast to expectations of a draw of roughly the same size. The amount of gasoline supplied to the domestic market is now some 10% below the five-year average. Demand for jet fuel is faring even worse, with supplies running at more than 40% below the five-year average. 

The figures suggest that the fresh wave of Covid-19 infections, which is hitting the upper Midwest particularly hard, is eroding consumer confidence and eating into discretionary travel. 

There were a couple of glimmers of hope from the U.S. economy earlier: existing home sales rose to their highest monthly level since 2006 in September, while initial jobless claims fell much more sharply than expected last week. 

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News from the oil and gas sector was more mixed, with Bloomberg reporting that Exxon Mobil (NYSE:) CEO Darren Woods had warned staff of a round of upcoming – but unspecified – job cuts. Pioneer Natural Resources (NYSE:) CEO Scott Sheffield indicated he thought a turning point in the cycle was still some months away, telling the Financial Times in an interview that he expects Brent levels to return to $50 by the second half of next year. – “when demand starts coming back after vaccines are distributed throughout the world.” 

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