Crude oil futures shot to their highest value in nearly 90 days amid economic data indicating the strongest U.S. economic growth in 12 months and progress with the sovereign debt crisis in the euro zone, according to published reports.
The U.S. Department of Commerce announced the nation's gross domestic product gained 2.5 percent during the three-month period of the third quarter, which was not as high as projections indicated yet higher than figures from the two previous quarters of the year. The U.S. is the globe's top consumer of crude oil, using more than 19 million barrels per day last year, according to data cited by the BP Statistical Review.
To alleviate pressure on beleaguered Greece, which is awaiting its second tranche of emergency international aid since June 2010, leaders in the euro zone convinced bondholders to accede to 50 percent losses on debt from the Aegean nation. The European Financial Stability Facility, an emergency fund to assist troubled nations, was augmented to 1 trillion euros, roughly equal to $1.4 trillion.
"These two reports in concert are likely to engender significant optimism," president Jason Schenker with energy consultancy Prestige Economics in Texas told Bloomberg. "The most important thing is that some confidence in the economy is restored."
Second quarter gross domestic product figures in the U.S. were 1.3 percent while the first quarter's gross domestic product was only 0.4 percent. The Department of Commerce indicated household purchases, the largest segment of the U.S. economy, gained 2.4 percent, exceeding the 1.9 percent median projection cited by a survey conducted by Bloomberg.
At 4:32 p.m. on Thursday, crude oil futures gained 2.84 percent, a $3.09 gain to $112 per barrel.
Euro zone leaders boosted the size of the EFSF in order to isolate the sovereign debt scourge that has infected euro zone nations in addition to Greece. Ireland already was granted a bailout and Spain, Italy and Portugal are believed to be immersed in high levels of debt.
The increased size of the EFSF merged with the uplifting economic data from the Department of Commerce prompted one analyst to laud the ripe conditions for crude oil futures to gain.
"The bullish stars are in line," Matt Smith with Summit Energy told Dow Jones Newswires, noting an additional plus is that U.S. oil inventories are hovering around the lowest levels in five years.
Earlier this week, crude oil prices touched their top amount since the second day of August.
Crude prices will hover around these levels during what Smith called "a few days of euphoria," though a weak U.S. demand for the energy commodity might prove to be of concern for limiting gains in price.
He also noted that shipments to the U.S. are likely to gain, but in the meantime market circumstances are fertile, the analyst said.
"Stocks are going to fill up as imports are starting to rise again," Smith told the publication. "From a bigger picture view, the market is pretty well supplied for now and demand is tepid to put it mildly."
An analyst with Commerzbank noted the contrast with Wednesday's gasoline futures performance, which was bearish.
"There's a risk-on mood in the market, despite yesterday's rather bearish (U.S.) inventory report," Carsten Fritsch told Reuters.
Crude oil futures also dropped in value on Wednesday, falling 3 percent due to an increase in U.S. inventories of 4.7 million barrels, which was more than anticipated. Another reason for Wednesday poor performance is skepticism about what euro zone officials achieve in Brussels.
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