By Paul Carsten and Alex Lawler
LONDON (Reuters) -Oil was broadly steady on Thursday, finding support from continuing expectations of a looming cut in U.S. interest rates after the release of jobs data, and a larger than expected decline in U.S. crude stocks.
The number of Americans filing new applications for unemployment benefits rose more than expected last week. Initial claims for state unemployment benefits increased 20,000 to a seasonally adjusted 243,000 for the week ended July 1.
Brent futures were unchanged at $85.08 a barrel by 1337 GMT. U.S. West Texas Intermediate (WTI) crude was up 6 cents, or 0.1%, at $82.91. Both had registered gains in the previous session.
“It is a lukewarm reaction to the jobless claims data,” Tamas Varga of oil broker PVM told Reuters. “Nonetheless, I believe that healthy expectations of a Fed rate cut in the not-so-distant future will limit downside.”
Oil also found suppport from falling stocks. Crude inventories in the United States, the world’s largest consumer, fell by 4.9 million barrels last week, data from the U.S. Energy Information Administration showed on Wednesday, more than forecast by analysts in a Reuters poll.[EIA/S]
“Healthy demand signals from the U.S. outweigh concerns from modest Chinese growth last week,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
“Hopes of a Fed easing (of interest rates), which can boost economic growth, and current summer travel in the U.S. are ensuring enough traction in oil demand from the world’s largest economy.”
Federal Reserve officials said on Wednesday that the U.S. central bank is closer to cutting rates given inflation’s improved trajectory and a labour market in better balance, possibly setting the stage for a reduction in September.
U.S. economic activity expanded at a slight to modest pace from late May through early July with firms expecting slower growth ahead.
The European Central Bank kept interest rates unchanged as expected on Thursday and gave no hints about its next move, arguing that domestic price pressures remain high and inflation will be above its target well into next year.
However, Chinese economic growth remains a concern. Chinese leaders signalled on Thursday that Beijing would stay the course with economic policy, though few concrete details were disclosed. Together, those helped to check investor hopes of a push to boost consumption in the world’s second-largest economy.
This post is originally published on INVESTING.
