Crude rises on surprise drop in US jobless claims

NEW YORK: US crude gained more than $1 a barrel on Thursday as data showed an unexpected drop in US unemployment benefits and the dollar weakened.

Brent oil rose modestly, but the restart of a North Sea pipeline system limited gains for the London-traded benchmark crude.

The drop in last week's initial claims for US unemployment benefits stoked optimism about the pace of recovery in the world's largest economy.

The euro firmed after the European Central Bank left its benchmark interest rate unchanged and a successful Spanish debt auction eased some investor concern about the euro zone.

The dollar index declined by nearly 0.5 percent. A weaker greenback can boost demand for dollar-denominated commodities such as oil.

Brent rose 9 cents a barrel to settle at $111.15. US crude gained $1.13 to settle at $91.56 per barrel. That drove down Brent's premium versus US crude to $19.59 per barrel, from $20.63 on Wednesday.

"US jobless claims data and the ECB's move are helping US oil futures to rebound from a two-month low earlier this week," said Gene McGillian at Tradition Energy in Connecticut. He attributed Brent's poorer performance on Thursday to the pipeline restart.

The 80,000-barrels-per-day North Sea Brent pipeline system shut on Saturday, the second Brent pipeline outage in two months.

Production of North Sea Forties crude was also seen rising, with some 400,000 bpd set to load in April, up from 368,000 bpd in March, according to loading programs.