Crude oil gains after ECB rate cut, Greece, G-20 in focus

Crude oil gains after ECB rate cut, Greece, G-20 in focus
Crude oil gains after ECB rate cut, Greece, G-20 in focus
Crude oil gains after ECB rate cut, Greece, G-20 in focus
Crude oil gains after ECB rate cut, Greece, G-20 in focus
Crude oil gains after ECB rate cut, Greece, G-20 in focus
Crude oil gains after ECB rate cut, Greece, G-20 in focus

Forexpros – Crude oil futures rose to a seven-day high in choppy trade on Thursday, amid reports that Greece abandoned plans to hold a referendum on its recent bailout deal and after the European Central Bank unexpectedly cut its benchmark interest rate.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at USD93.70 a barrel during U.S. morning trade, climbing 1.3%.    

It earlier rose by as much as 1.8% to trade at USD94.22 a barrel, the highest price since October 25.

According to media outlets, Greek Prime Minister George Papandreou gave up plans for the referendum after the country's main opposition party said it would back the bailout, citing two officials close to the Greek premier.

Meanwhile, the ECB cut its benchmark interest rate from 1.5% to 1.25% earlier in the day, as the region’s escalating debt crisis overshadowed concerns over persistently high inflation.

Speaking at the bank’s post policy meeting press conference new president, Mario Draghi said that ongoing tensions in financial markets could slow the pace of growth in the euro zone and said the region’s economy continued to be “subject to particularly high uncertainty and intensified downside risks.”

Crude prices found further support after the U.S. Department of Labor said that initial jobless claims fell by 9,000 to 397,000 last week, beating expectations for a decline to 400,000. It was the lowest figure in six weeks.

Oil traders have been paying close attention to readings on U.S. employment levels for signs that people are returning to work, thus driving more and using more energy.

Prices came off their highs after the U.S. the Institute of Supply Management said that its non-manufacturing purchasing managers' index fell by 0.1 points to 52.9 in October from 53.0 in September. Analysts had expected the index to rise by 0.7 points to 53.7 in October.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for December delivery rose 0.75% to trade at USD110.16 a barrel, with the spread between the Brent and crude contracts standing at USD16.46 a barrel.

Wall Street lender J.P Morgan expects Brent to average USD115 next year amid falling inventories and low spare production capacity of suppliers.

In a report published Wednesday the bank said, "The oil market is very tight and that means it can easily rally by USD10 to USD20 in a blink on seasonal demand or supply-side issues."