U-Turn: U.S. Crude Prices Swing to Green

Reuters

Oil futures rallied on Tuesday, erasing losses on strong jobs data, U.S. government forecasts for lower domestic crude production growth and higher global demand for oil.

U.S. job openings surged to a 14-year high in February the Labor Department's monthly Job Openings and Labor Turnover Survey (JOLTS) said.

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"That JOLTS report was certainly quite strong and strong employment equals strong gasoline demand," said John Kilduff, partner at Again Capital LLC in New York.

Also supportive was an Energy Information Administration (EIA) monthly report raising forecasts for U.S. and global demand growth and lowering forecasts for crude oil production growth in the United States.

U.S. May crude rose $1.84 to settle at $53.98 a barrel after dropping to $51.17. The $54.13 peak was the highest since reaching $54.15 on Feb. 17.

Brent May crude rose 98 cents to settle at $59.10, having swung from $57.02 to $59.27, highest since March 26.

Saudi Arabia's Oil Minister Ali al-Naimi reiterated that the kingdom was ready to help stabilize oil markets with participation of other producer countries, adding support to prices.

"Naimi saying again his comment about being ready to act if other producers cooperate added to two days of bullishness," said Dominick Chirichella, senior partner at Energy Management Institute in New York.

Prices also got a lift from news that Minneapolis Fed President Narayana Kocherlakota made a case for waiting until the second half of 2016 to raise interest rates, and to then raise them gradually to just 2 percent by the end of 2017.

Crude futures recovered after slipping on signs of growing oversupply as Iranian officials visited China to seek more oil sales following the framework nuclear deal that could lead to lifting sanctions on Tehran.

Prices also felt pressure from a Goldman Sachs report saying prices needed to remain low for months to slow U.S. oil output growth.

The American Petroleum Institute's (API) weekly report on U.S. oil inventories is due Tuesday at 4:30 p.m. EDT (2030 GMT), with the EIA's report following on Wednesday at 10:30 a.m. EDT.

U.S. commercial stocks were seen extending their record build for a 13th consecutive week, a Reuters survey on Monday showed. [EIA/S]

On Monday, industry intelligence provider Genscape said its data showed stocks at the Cushing, Oklahoma, oil hub rose by the relatively small amount of 169,000 barrels last week.

(By Robert Gibbons; Additional reporting by Christopher Johnson in London and Henning Gloystein and Florence Tan in Singapore; Editing by Marguerita Choy and Andrew Hay)