SINGAPORE: Oil rose 0.6 percent on Friday, heading for its biggest weekly gain since May, after data showed robust US demand growth and falling inventories, while positive economic indicators lifted sentiment across markets.
Asian stocks rallied for a second day and the euro held near two-month highs, following a fall in US jobless claims to a two-month low and an upbeat view of the euro zone’s recovery from the European Central Bank.
A stronger US economy would bolster crude consumption, with data on Thursday showing the nation’s demand for distillates including diesel soared 30 percent in the past four weeks from a year earlier.
Also, US crude inventories dropped 5 million barrels last week, more than twice as much as expected, the Energy Information Administration said.
"Oil was probably sold too heavily to the downside," said Peter McGuire, managing director at CWA Global Markets in Sydney. "Distillate usage is a wonderful indicator for tracking industrial production, it’s a great sign of a turnaround."
US crude for August rose 46 cents to $75.90 a barrel by 0503 GMT, after touching an intraday peak of $76 on Thursday, the highest price this month. ICE Brent gained 41 cents to $75.12.
Oil was headed for a 5.2 percent increase this week, its fourth-biggest weekly gain of the year.
But front-month WTI was still well below a 19-month peak above $87 reached in early May, having rebounded sharply from a trough below $65 on May 20.
Wall Street staged a late-day surge on Thursday, extending a rally to three days on data showing US first-time jobless claims fell to their lowest in two months, and after a handful of large retailers reported solid sales.
During the previous earnings season, oil was trading above $80 a barrel.
"With equity markets rebounding, there is a little bit more positive sentiment," McGuire said.
The oil market awaits Chinese trade data, to be published on Saturday, for further price direction.
Year-on-year import and export growth probably slowed last month from the sizzling pace set in May, in large part reflecting a higher base of comparison as the global recovery gained strength around the middle of last year.
Oil inventories at the US Cushing, Oklahoma, crude oil hub, the delivery point for NYMEX futures, fell more than 350,000 barrels in the week to July 6 to 38.9 million barrels, figures from energy industry data provider Genscape showed on Thursday.
The euro received a boost from details about Europe’s bank stress tests, which heartened investors who saw criteria for the checks were no worse than markets expected.
