Crude oil prices gained ground in Thursday trading as European industrial production declines offset continued improvements in the U.S. labor market.
Brent prices increased for the second straight day Thursday, gaining 1.3 percent from the previous close to sell at $58.32 per barrel for the April contract. Brent in mid-January sold for less than $45 per barrel, but has been unable to hold above the $60 mark for any extended period so far this year.
Oil prices are trading at a discount from their June 2014 high above $100 per barrel as markets shift away from the demand side on continued concerns about the health of the global economy.
Eurostat, the statistics office for the European Union, said Thursday there were still lingering problems for the regional economy. Industrial production in December grew by just under one-half percent but dropped 0.1 percent in January. Year-on-year, industrial production grew by 1.1 percent across the European economy.
A weak European economy has pushed the value of the euro to historic lows, diminishing the buying power for regional consumers that may otherwise benefit from the low price of oil.
In the United States, the Labor Department said seasonally adjusted claims for unemployment for the week ending March 7 fell 36,000 from the previous week. Fewer people in Texas filed claims, while more people in North Dakota did so for the week, the department said. Texas and North Dakota are the No. 1 and No. 2 oil producers in the nation, respectively.
The low price of oil is forcing energy companies to cut staff and spend less on exploration and production. Rig numbers in North Dakota, which provides a benchmark for energy sector activity, is down 42 percent from this week in 2014.
The price of West Texas Intermediate, the U.S. benchmark, was up a fraction of a percent from the previous session to $48.43 per barrel.
A March note from Energy Intelligence finds oil markets sustained on the supply side, suggesting a mid-term drop in oil prices seems "inevitable." Prices short-term may be vulnerable as the April contract expires next week.
