Oil up more than two per cent on U.S. jobs data

NEW YORK — Oil futures gained more than two per cent on Thursday, supported by a drop in U.S. unemployment and a drawdown in crude inventories, but a resurgence in U.S. coronavirus infections fanned concerns that economic activity will weaken in coming weeks.

New COVID-19 cases in the United States rose by nearly 50,000 on Wednesday, the biggest one-day increase since the start of the pandemic.

Numerous states are advising citizens to restrict movements and closing businesses and restaurants again, which is expected to hamper job growth.

Brent crude futures settled at US$43.14 a barrel, rising $1.11, or 2.6 per cent. U.S. West Texas Intermediate crude futures settled at $40.65 a barrel, up 83 cents, or 2.1 per cent.

"At this time, the economic data seems to be outpacing the COVID-19 infections and it seems the growth is happening despite this uptick in cases," said Phil Flynn, senior analyst at Price Futures Group in Chicago.

U.S. non-farm payrolls increased by 4.8 million in June, beating expectations, even as permanent job losses rose. Traders said the data could lessen the desire in Washington

for more federal support for the economy.

"The jobs report was good, but the flip side of that was that it was so good that it might inhibit a stimulus program," said Bob Yawger, director of energy futures at Mizuho.

U.S. energy firms cut the number of operating oil and natural gas rigs to a record low for a ninth straight week, according to Baker Hughes Co.

U.S. crude inventories fell 7.2 million barrels from a record high last week, more than expected, the U.S. Energy Information Administration said.

Gasoline stockpiles were higher, however, and the spike in cases in heavily populated U.S. Sun Belt states, among that country's biggest consumers of gasoline, could hit fuel demand headed into the July 4 holiday weekend, often a busy period for travel.