U.S. oil futures hit 3-week high after U.S. data, supply report ahead

Investing.com - U.S. oil futures hit a three-week high on Thursday, on signs that economic growth is accelerating in the U.S., the world’s biggest oil-consuming nation.

On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in March traded at USD97.19 a barrel during U.S. morning trade, up 0.5%.

New York-traded oil futures hit a session high of USD97.33 a barrel earlier in the day, the strongest level since January 2.

WTI oil prices settled up 1.85% on Wednesday to end at USD96.73 a barrel. Nymex oil futures were likely to find support at USD95.12 a barrel, the low from January 22 and resistance at USD97.99 a barrel, the high from December 5.

The U.S. Department of Labor said earlier that the number of individuals filing for initial jobless benefits in the week ending January 18 increased by 1,000 to a seasonally adjusted 326,000 from the previous week’s revised total of 325,000.

Separately, Markit said that its preliminary U.S. manufacturing purchasing managers’ index declined to a seasonally adjusted 54.3 this month from a final reading of 55.0 in December.

Investors now looked ahead to key U.S. weekly supply data due later in the day to gauge the strength of oil demand from the world’s largest consumer.

Thursday’s government report was expected to show that crude oil stockpiles rose by 0.6 million barrels last week, while gasoline inventories were forecast to increase by 2.1 million barrels.

After markets closed Wednesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 4.86 million barrels in the week ended January 17. The data also showed that gasoline stockpiles increased by 1.1 million barrels.

The data came out one day later than usual due to the Martin Luther King Jr. Day holiday earlier in the week.

Oil prices were lower earlier in the day after data showed that China’s HSBC Flash Purchasing Managers Index, the earliest indicator of the country's industrial activity, fell to a six-month low of 49.6 in January from a final reading of 50.5 in December.

The Asian nation is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for March delivery shed 0.25% to trade at USD107.98 a barrel, while the spread between the Brent and U.S. crude contracts stood at USD10.79 a barrel.