Thursday’s (April 22) reports that showed improvements in the number of initial jobless claims and the number of existing home sales for March, along with a string of positive earnings reports this week have helped propel fuel prices over $84.

After rising to the $86 level, oil prices had dropped to around $81 earlier this week, but after gains Thursday and an additional 73 cent gain early Friday, benchmark crude oil scheduled for June delivery was at $84.43 in midday trade on the New York Mercantile Exchange.

Thursday’s report on unemployment showed a drop of 24,000 in the number of new jobless claims for a total of 456,000 claims. Sales of existing homes were up by 6.8 per cent during March. These reports were received generally well Thursday leading to gains in the dollar.

Later in the day Thursday and carrying into Friday, speculators on oil prices have shown their confidence that the improving economy is certain to drive oil and fuel consumption by businesses and consumers in the coming months.

Also adding to the speculation was the latest inventory report that showed a reduction in crude supplies.

Earnings reports this week have been generally strong as well, which adds to the expectation that business expansion could increase demand for business travel and adding of jobs. Business travel and more money in the hands of consumers would both contributing to demand for and spending on oil-based products.

Netflix, Apple, and Starbucks were among the top companies reporting this week. Netflix showed an addition of another 1.7 million subscribers during its first quarter, further solidifying the company as the current figurative leader in the home video rental market.

Another report on housing Friday showed a remarkable 27 per cent increase in sales of new homes during March, following a record low in February. This adds to the growing sentiments that the economy is becoming more and more grounded.

The dollar’s firmness continues to pose some opposition to further growth in oil prices, but crude inventory levels are likely to have more near-term impact. A string of crude supply reports showing lower levels of inventory are sure to support the price of oil above $80.

Neil Kokemuller

LiveCharts.co.uk

Neil Kokemuller is an Associate Professor of Marketing at Des Moines Area Community College in Des Moines, Iowa, USA. He has a MBA from Iowa State University. He is also in house stock market commentator at Live Charts UK, where you can find real time charts and share prices .

Please note: The information provided in this article is intended for informational and entertainment purposes, and not as advice for financial decisions or investments. Actions taken on the basis of the information shared is at the sole risk and discretion of the individual. Currency investment poses significant risk of loss.

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