US recovery pushes oil to three-week

Oil surged to a three-week high in New York amid signs that the US economic recovery is whittling down crude inventories in the world's largest user. Futures climbed as much as 2.1 per cent in New York after reports showed that US companies added 157,000 workers in June and applications for unemployment benefits declined last week. The American Petroleum Institute said on Wednesday that crude inventories dropped 3.2 million barrels last week. An Energy Department report due later yesterday is also forecast by analysts to show a drop. Morgan Stanley said it is bullish on oil in the second half of 2011 as production capacity falls. "Uncertainty in the Eurozone is contrasting with improving numbers in the US," said Andrey Kryuchenkov, an analyst at VTB Capital in London. "For now the short-term sentiment in oil market is positive as the market tracks macroeconomic themes, though the stronger dollar could cap gains in commodities." Crude for August delivery gained as much as $2.05 to $98.70 (Dh362.53) a barrel in electronic trading on the New York Mercantile Exchange. That's the highest since June 15. It was at $98.63 in London. Thursday, the contract fell to $96.65, the lowest since July 1. Brent crude for August settlement on the London-based ICE Futures Europe exchange rose $2.69, or 2.4 per cent, to $116.31 a barrel. The European benchmark was at a premium of $17.68 to US futures. The difference reached a record $22.29 on June 15. US initial jobless claims fell by 14,000 to 418,000 in the week ended July 2, Labour Department figures showed yesterday in Washington. The median forecast of economists in a Bloomberg News survey called for a drop to 420,000 jobless claims. From / Gulf News