Oil prices rallied this afternoon with Brent crude topping US$123 per barrel on positive US and Chinese data as well as better than expected results of a debt auction in Spain.
Concerns over the impact of the Iranian nuclear crisis on oil supplies provided more support for oil prices after the US Department of Energy said the global oil market is growing tight.
The US Department of Labor reported a 2,000 drop in jobless claims to 351,000 for the week to February 26.
Importantly, the less volatile four week moving average slid 5,500 to 353,000, the lowest level in four years in yet another sign that the US economic recovery is gaining momentum.
The bullish employment report followed yesterday’s upward revision of the US economic growth estimate for the fourth quarter of 2011 from 2.8 percent to three percent by the Commerce Department.
Early today, China released its official PMI index for February, which came in at 51, showing that the factory sector expanded at the fastest pace in four months. China is currently the world’s second largest oil consumer behind the US.
Speaking of the US, the Energy Information Administration, the research arm of the Department of Energy, said yesterday that there may not be enough spare production capacity to fully make up for the loss of Iranian exports if they are taken off the market.
The US is currently trying to impose sanctions on companies doing business with Iran to reduce its oil exports.
The Middle Eastern country, which is accused of illegally developing a nuclear weapon, is currently the world’s fifth largest producer of crude oil, exporting 2.3 million barrels of oil per day.
US light, sweet crude for April delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), added 58 cents to reach US$107.65/barrel in morning trade in New York.
April Brent crude rallied 64 cents to US$123.45/barrel on the ICE Exchange this afternoon.
Today’s top risers in the sector were:
JKX Oil & Gas (LON:JKX), up 15 percent at 152.5 pence at midday
TXO (LON:TXO), up 15 percent at 0.69 pence
Enegi Oil (LON:ENEG), up 12 percent at 20.05 pence
Lochard Energy (LON:LHD), up 11 percent at 11.51 pence
Madagascar Oil (LON:MOIL), up 10 percent at 37.47 pence
The top fallers were:
Woburn Energy (LON:WBN), down 12 percent at 2.05 pence at midday
Egdon Resources (LON:EDR), down 9.5 percent at 11.45 pence
Sefton Resources (LON:SER), down 8 percent at 2.9 pence
Global Petroleum (LON:GBP), down 7 percent at 16.77 pence
Urals Energy (LON:UEN), down 4.5 percent at 7.56 pence