NEW YORK, Sept. 10 (UPI) — Positive momentum in the U.S. labor market helped offset concerns about lowered forecasts for oil, giving key price indices a lift in early Thursday trading.
The U.S. Labor Department said the number of people filing first-time claims for unemployment dropped 6,000 to a seasonally adjusted 275,000 for the week ending Sept. 5. That’s the 27th consecutive week first-time claims remained below 300,000, indicating the U.S. labor market may be the strongest it’s been since the mid 1970s.
West Texas Intermediate, the U.S. benchmark for crude oil prices, climbed three quarters of a percent above the previous close to start Thursday trading at $44.48 per barrel. The global benchmark, Brent, gained only a fraction of a percent to $47.58 per barrel.
Low crude oil prices have resulted in layoffs in some sectors of the U.S. economy, but translate to a de facto stimulus in the form of cheaper gasoline. Demand for gasoline in the United States is high, with the Federal Highway Administration reporting U.S. drivers traveling a record 1.54 trillion miles during the first half of 2015.
“Monthly data show gasoline consumption in the United States increased by 3 percent during the first half of 2015 compared with the first half of 2014,” a report from the U.S. Energy Information Administration read.
Weaker demand and a surplus of crude oil in the global marketplace have pushed crude oil prices down by about 50 percent from the June 2014 peaks. Slow Chinese growth and weak European economic recovery have added recent downward pressure to the price of crude oil. In the United States, EIA said it expects crude oil production to drop by about 4 percent from 2015 levels by next year.
Despite Thursday’s rally, crude oil prices continue to test new lows. EIA said in a short-term market report WTI could be as low as $32 per barrel for the December contract.
