The price of oil rose Thursday on indications that the U.S. economy still needs the Federal Reserve to maintain its current stimulus measures.
Benchmark oil for July delivery rose 48 cents to $93.61 a barrel. That marked a reversal of Wednesday’s sentiment, when oil fell $1.88 on concerns the Fed would taper its stimulus program.
The government said the economy grew 2.4 percent in the first quarter, slightly slower than initially estimated. Also, the number of Americans seeking unemployment aid rose last week, a sign layoffs have increased.
That makes it more likely the Fed will continue buying $85 billion of bonds each month in an effort to keep interest rates low and encourage borrowing, lending and investing. That environment has helped make oil a more attractive investment than low-yielding options such as bonds.
Meanwhile, the U.S. Energy Department’s Energy Information Administration said the nation’s supply of oil rose last week by 3 million barrels to 397.6 million barrels, the highest level since the government started collecting the data in 1978. But gasoline supplies fell by 1.5 million barrels just ahead of the Memorial Day weekend. That was twice the drop analysts expected, and indicated that demand picked up during what is considered the start of peak driving season.
On Friday, ministers from the Organization of the Petroleum Exporting Countries will meet in Vienna to discuss, among other things, production levels. But more complex issues also face OPEC, including the rise of shale oil production in the U.S. The Paris-based International Energy Agency says total production could top 9 million barrels a day by 2018, which would mean near self-sufficiency for the U.S., as well as significantly less dependence on OPEC imports.
Brent crude, a benchmark for many international oil varieties, fell 24 cents to $102.19 a barrel on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
- Wholesale gasoline rose 1 cent to $2.81 a gallon.
- Heating oil fell 3 cents to $2.84 per gallon.
- Natural gas shed 16 cents to $4.02 per 1,000 cubic feet.
In other trading, the price of wheat ended lower after genetically modified wheat was found in a field in Oregon.
No genetically engineered wheat has been approved for U.S. farming by the United States Department of Agriculture. The discovery of the grain in an Oregon field, which wasn’t designated for sale, caused traders to worry that more of the unapproved grain might be found.
Wheat for July delivery fell 4 cents to $6.9875 a bushel.
Other crop futures also fell. Corn lost 10.75 cents to $6.5425 a bushel, and soybeans fell 6 cents to $14.9575.
Metals prices rose. Gold ended up $20.20 at $1,411.50 an ounce. Silver rose 23.7 cents to $22.69 an ounce.
July platinum rose $29.70 to $1,482.70 an ounce, June palladium rose $10.20 to $758 an ounce and July copper rose 1.85 cents to $3.3155 a pound.