Oil prices rise slightly above $92 in Europe after drop in US jobless claims

The price of oil rose above US$92 a barrel Friday after a big drop in U.S. unemployment benefit claims suggested some improvement in the world’s biggest economy, raising expectations for increased demand for energy.

By early afternoon in Europe, benchmark West Texas Intermediate crude for November delivery was up 21 cents at US$92.28 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained 82 cents to close at US$92.07 per barrel in New York on Thursday.

Brent crude, which is used to price international varieties of oil, was down 53 cents at US$115.18 on the ICE Futures exchange in London.

The U.S. Labour Department said Thursday that applications for unemployment benefits fell last week to 339,000. That’s the lowest in more than four years. If sustained, the lower level could signal stronger hiring.

“We’re going to look for more workers and consumers driving and more diesel demand from manufacturers and retailers delivering,” said Carl Larry, president of Oil Outlooks and Opinions.

Oil prices rose Thursday as tension between Turkey and Syria raised concerns that crude oil supplies from the Middle East could be disrupted.

On Thursday, Turkey said it forced a Syrian passenger plane to land because it believed it was carrying banned cargo from Russia. Syria called the incident piracy. The two countries have traded artillery fire over Syria’s northern border throughout the past week.

The bullish news for oil prices from the Middle East was partly tempered by projections from the International Energy Agency which forecast smaller oil demand growth over the next five years.

The IEA said it expected “the global oil market to become somewhat less tight over the medium term than it has been through most of the last decade, as a combination of demand and supply factors will cause OPEC spare capacity to return to more comfortable levels.”

In other energy trading on the New York Mercantile Exchange, heating oil fell 1.68 cents to US$3.2403 a U.S. gallon (3.79 litres), wholesale gasoline retreated 5.72 cents to US$2.8984 a gallon and natural gas was down 0.5 cents to $3.599 per 1,000 cubic feet.