The price of oil inched up to near $97 a barrel on Thursday, as markets awaited the outcome of a European Central Bank policy meeting and a report on U.S. jobless claims.
By early afternoon in Europe, benchmark crude for March delivery was up 29 cents to $96.91 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 2 cents to finish at $96.62 a barrel on Wednesday, recovering from a low of $95.04 earlier in the session.
While the ECB is not expected to cut interest rates Thursday, attention will be focused on President Mario Draghi's post-meeting comments about the strength of the euro.
The euro has been gaining on the dollar over the past months, rising from around $1.23 in mid-August to over $1.35 this week. A strong euro hurts the export prospects of the 17 countries in the common currency zone and it also tends to result in higher oil prices by making crude priced in dollars cheaper — and a more enticing investment — for traders using currencies other than the greenback.
On Thursday, the euro was at $1.3562, up from $1.3520 late Wednesday in New York.
"Crude oil prices rebounded and climbed higher ahead of the crucial ECB meeting, as risk appetite increased," said a report from Sucden Financial Research in London. "In addition, the release of the weekly jobless claims figures could give some direction to the (dollar) and provide some momentum to the oil market."
Wednesday's oil price recovery was attributed mainly to a small-than-forecast rise in U.S. crude stocks, with analysts highlighting data from the Department of Energy showing a "strong decline" of U.S. crude imports from Saudi Arabia.
"On the four week average, they have fallen below 1 million barrels a day for the first time since 2011," said Olivier Jakob of Petromatrix in Switzerland. "The U.S. needs to import less crude due to the increase in its domestic production and our opinion remains that Saudi Arabia is cutting production and exports to prevent a global stock build that would come from a re-direction of the crude that it is not shipping to the U.S."
In London, Brent crude, used to price international varieties of oil, was up 90 cents to $117.63 a barrel on the ICE Futures exchange.
In other energy futures trading on Nymex:
— Wholesale gasoline added 2.1 cents to $3.0607 a gallon.
— Natural gas advanced 3.1 cents to $3.449 per 1,000 cubic feet.
— Heating oil gained 1.59 cents to $3.2017 a gallon.