Oil futures rallied yesterday erasing losses on strong jobs data and US government forecasts for lower domestic crude production growth and higher global demand for oil.
US job openings surged to a 14-year high in February the Labour Department said in its monthly Job Openings and Labour Turnover Survey, lifting oil prices
“That report was certainly quite strong and strong employment equals strong gasoline demand,” said John Kilduff, partner at Again Capital LLC in New York. Oil got more support from news that Minneapolis Fed president Narayana Kocherlakota made a case for waiting until the second half of 2016 to raise interest rates.
Crude futures got additional lift when an Energy Information Administration monthly report raised forecasts for US and global demand growth and lowered forecasts for crude oil production growth in the United States.
US May crude was up $ 1.65 at $ 53.79 a barrel at 12:58pm eastern time, having traded from $ 51.17 to $ 53.84. Brent May crude was up $ 1.10 at $ 59.22, having swung from $ 57.02 to $ 59.27.
Also cited as supportive was news that an oil spill into the Mississippi River on Monday forced authorities to close part of the waterway in Louisiana.
Eight refineries along the river in the region account for about 12% of US refining capacity, according to the energy administration.
Crude futures fell earlier on signs of growing oversupply as Iranian officials visited China to seek more oil sales following the framework nuclear deal that could lead to lifting sanctions on Tehran.
Prices also were pressured by a Goldman Sachs report saying prices needed to remain low for months to slow US oil output growth.
US commercial stocks were seen extending their record build for a 13th consecutive week, a Reuters survey on Monday showed.
On Monday, industry intelligence provider Genscape said its data showed stocks at the Cushing, Oklahoma, oil hub rose by the relatively small amount of 169,000 barrels last week.