Buoyed by hopes that a boost in stimulus in the Euro area may bolster energy demand from the region, sparked a sharp rally in crude oil prices which spiked by more than 1.7 per cent in the domestic market on Thursday.Against the backdrop of a weakening inflation and growth outlook in the 19-member Euro area, especially in light of the ongoing global financial rout, the European Central Bank (ECB) which maintained its benchmark rate at a record low of 0.05 per cent, vowed to expand its QE program if needed as it stressed that the central bank stands ready to deploy all its weaponry in its arsenal, if required, to boost Euro area growth and inflation, lifting the demand outlook for the fuel.
Meanwhile, a drop in US crude oil production last week eased concerns over a global supply glut. US crude oil output fell by 119,000 barrels per day to 9.22 million barrels per day last week, even as stockpiles rose by 4.7 million barrels.
Investors cast aside mixed US economic data which showed that the number of Americans who filed for claiming jobless benefits jumped to the highest level in eight weeks, up by 12,000 to 282,000 last week but a services gauge remained near the highest level in a decade at 59 in August, tad below July’s 60.3, but well above the neutral 50-mark, and the nation’s trade gap shrank 7.4 per cent to USD 42.9 billion in July. Oil may drop today amid caution ahead of the much anticipated US jobs data for the month of August which may offer further cues over the health of the US job market.
At the MCX, Crude oil futures, for the September 2015 contract, closed at Rs 3,086 per barrel, up by 1.71 per cent, after opening at Rs 3,048, against the previous close price of Rs 3,034. It touched an intraday high of Rs 3,213.
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