Oil prices climb higher

AFP

LONDON: World oil prices were higher on Thursday, winning support from firmer equities and the weaker dollar after recent falls that were sparked by downbeat news in key consumer the United States.

New York's main contract, light sweet crude for delivery in September, climbed 29 cents to 77.28 dollars a barrel.

Brent North Sea crude for September gained 28 cents to 76.34 dollars in early afternoon London deals.

Analysts said the weaker dollar spurred some buying because oil is traded in the US currency, making the commodity cheaper for holders of stronger units.

The euro hit its highest level against the dollar since May on Thursday, boosted by upbeat data while the US unit was hampered after the US Federal Reserve warned on the economic outlook.

The Federal Reserve said in its latest Beige Book report on Wednesday that the "modest" recovery is slowing in some parts of the country,

"Crude trading (is) relatively subdued," said analysts at the Sucden Financial Research brokerage in London.

The "Beige Book from the US Fed highlighted concerns that the US economy is facing some difficulties."

Europe's leading stock markets meanwhile rose on Thursday, lifted by strong company results while a rise in eurozone business and consumer confidence to its highest level in more than two years added to the positive tone.

On Wednesday, the US Department of Energy said crude oil inventories jumped 7.3 million barrels last week in the United States, the world's top energy consuming nation.

That was the strongest weekly increase since October 2008 and confounded market expectations for a drop of 1.4 million barrels.

Gasoline (petrol) stocks rose 100,000 barrels, below analyst expectations for a build of 500,000 barrels, and distillates, which includes heating oil and diesel, rose by 900,000 barrels, while analysts projected a 2.1-million-barrel gain.

Rising stockpiles indicate softer demand. As the top energy consuming nation, US demand is a key influence on the oil market.

The data came on top of growing evidence of weak US consumer confidence which has sapped hopes for a strong economic recovery.