- Brent crude was up $1.25, or 1.8%, at $72.84 a barrel
- Crude oil processing will probably take considerably longer to recover from the outages than crude oil production, which suggests that crude oil stocks will increase in the coming weeks," says Commerzbank
LONDON: Oil prices rose more than $1 on Thursday, supported by optimism about the pace of the economic recovery from the pandemic, a sharp decline in US crude stocks and a weaker dollar.
Brent crude was up $1.25, or 1.8%, at $72.84 a barrel by 1341 GMT and West Texas Intermediate (WTI) crude rose $1.39, or 2%, to $69.98.
The number of Americans filing new claims for jobless benefits fell last week, while layoffs dropped to their lowest level in more than 24 years in August, suggesting the labour market was charging ahead even as new COVID-19 infections surge.
"Although oil is lagging equities, its downside is clearly limited by the general confidence surrounding the global economy despite consistent fears of the prolonged spread of the coronavirus," said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.
Meanwhile, India's gasoline demand is set to hit a record this fiscal year, with consumption accelerating as more people hit the road for business and leisure travel after easing of COVID-19 curbs.
In the United States, crude inventories dropped by 7.2 million barrels last week, the Energy Information Administration said on Wednesday.
Hurricane Ida, meanwhile, has affected about 80% of the Gulf of Mexico's oil and gas output. Oil refineries in Louisiana could take weeks to restart.
"Crude oil processing will probably take considerably longer to recover from the outages than crude oil production, which suggests that crude oil stocks will increase in the coming weeks," said Commerzbank analyst Carsten Fritsch.
Optimistic about the global economic recovery, the Organization of the Petroleum Exporting Countries and allied producers including Russia, together known as OPEC+, has raised its demand forecast for 2022.
The group agreed on Wednesday to continue a policy of phasing out record production reductions by adding 400,000 barrels per day (bpd) to the market.
"What is not so certain ... is whether demand will be able to grow as quickly as OPEC+ and the market predicts," said Rystad Energy's head of oil markets, Bjornar Tonhaugen, citing the risk of further coronavirus lockdowns to counter new variants of the virus.