Crude Oil Rallies To End Higher On Weak Dollar, Ukraine Crisis

(RTTNews) - U.S. crude oil ended higher in a late rally on Thursday, snapping a two-day loss, even as the dollar trending lower against a basket of major currencies amid the continued stand-off between Russia and West, with the U.S. imposing some sanctions against Moscow. Oil prices trended lower for most of the day on increased crude stockpiles in the U.S. and ahead of the important monthly U.S. jobs data due Friday.

Investors also mulled over some encouraging macroeconomic data out of the U.S., with initial claims for unemployment benefits declining more than expected last week.

Crude oil prices fluctuated amid hopes of a diplomatic resolution between Russia and Ukraine. However, matters became complicated after the Crimean parliament unanimously voted in favor of becoming a part of Russia on Thursday, even as world leaders exerted pressure on Russian President Vladimir Putin to pullout troops from Crimea. Russia has been occupying the strategically important Crimea region of Ukraine since the weekend.

Earlier today, a Labor Department report showed first-time claims for U.S. unemployment benefits to have dropped more than expected in the week ended March 1, which is an upbeat sign for the labor market ahead of tomorrow's monthly jobs report.

The U.S. Labor Department is scheduled to release its closely watched monthly employment report for February early Friday. Economists expect employment to increase by about 150,000 jobs in February following the addition of 113,000 jobs in January. The unemployment rate is expected to remain unchanged at 6.6 percent.

New orders for U.S. manufactured goods fell more than expected in January, a report from the Commerce Department showed Thursday.

Meanwhile, European Central Bank President Mario Draghi said Thursday the moderate recovery in the euro area is proceeding at a gradual pace, in sync with the bank's assessment, and inflation is expected to remain low for a prolonged period. The European Central Bank left its main refinancing rate unchanged at a record low 0.25 percent for a fourth month.

Elsewhere in Europe, the Bank of England kept its key interest rate at a record low 0.5 percent in support of the economic recovery.

Light Sweet Crude Oil futures for April delivery, the most actively traded contract, edged up $0.11 or 0.1 percent to close at $101.56 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for April delivery scaled a high of $101.64 a barrel intraday and a low of $100.13.

Yesterday, crude oil prices plummeted after a weekly report from the EIA showed crude stockpiles in the U.S. to have risen more than expected and with tensions easing in the Ukraine-Russia standoff.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.66 on Thursday, down from its previous close of 80.09 late Wednesday in North American trade. The dollar scaled a high of 80.20 intraday and a low of 79.59.

The euro trended sharply higher on the ECB's assessment of the European bloc economy. The euro traded higher against the dollar at $1.3861 on Thursday, as compared to its previous close of $1.3733 late Wednesday in North America. The euro scaled a high of $1.3872 intraday and a low of $1.3722.

In economic news, weekly initial jobless claims for U.S. unemployment benefits dropped to 323,000, a decrease of 26,000 from the previous week's revised figure of 349,000. Economists expected jobless claims to dip to 338,000 from the 348,000 originally reported for the previous week. This is the lowest level jobless claims have dropped since hitting 305,000 in the last week of November.

Factory orders in the U.S. dropped 0.7 percent in January after tumbling by a revised 2.0 percent in December. Economists expected orders to decrease by 0.5 percent compared to the 1.5 percent drop originally reported for the previous month. The drop in orders largely reflect another notable decrease in orders for transportation equipment, which fell by 5.7 percent in January after plunging by 12.1 percent in December.

The pace of labor productivity growth in the fourth quarter of 2013 showed a notable downward revision, with output rising much less than previously estimated, a U.S. Labor Department released showed Thursday. Productivity increased by 1.8 percent in the fourth quarter compared to the previously reported 3.2 percent increase. Economists expected the pace of productivity growth to be downwardly revised to 2.4 percent.

The European Central Bank's Governing Council left its In the latest macroeconomic projections, the ECB staff raised growth forecast for the year to 1.2 percent from 1.1 percent seen in December. The growth outlook for 2015 was maintained at 1.5 percent, while the first set of forecast for 2016 indicates growth at 1.8 percent.