March 7, 2013 / 12:20 PM / 5 years ago

UPDATE 8-Crude rises on surprise drop in U.S. jobless claims

* North Sea oil pipeline start-up limits Brent price gain
    * Coming up: China data, U.S. February jobs report Friday

 (Adds detail, updates with settlement prices)
    By Joshua Schneyer
    NEW YORK, March 7 (Reuters) - U.S. crude gained more than $1
a barrel on Thursday as data showed an unexpected drop in U.S.
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
    The drop in last week's initial claims for U.S. 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.
U.S. crude gained $1.13 to settle at $91.56 per barrel.
That drove down Brent's premium versus U.S. crude to $19.59 per
barrel, from $20.63 on Wednesday. CL-LCO1=R 
    "U.S. jobless claims data and the ECB's move are helping
U.S. 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
    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. 
    Crude futures had fallen on Wednesday after a U.S.
government report showed that domestic crude inventories rose by
3.83 million barrels last week, much more than the
500,000-barrel increase expected in a Reuters poll of analysts.
    Market participants are awaiting February trade data from
China scheduled for release on Friday, including crude demand
numbers, and the U.S. February nonfarm payrolls report that will
follow at 8:30 a.m. EST (1330 GMT).    

 (Additional reporting by Robert Gibbons in New York, Alex
Lawler in London and Ramya Venugopal in Singapore; Editing by
Grant McCool and Dale Hudson)

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