WTI crude oil futures trade in proximity to three-week highs after upbeat US jobless claims data

West Texas Intermediate crude oil traded close to highs unseen in three weeks in Friday, after a weekly report showed that the number of initial jobless claims in the United States decreased more than initially expected last week, which may be indicative that labor market in the worlds largest oil-consuming nation continued improving.

WTI futures were set for their first weekly gain in almost two months. On the New York Mercantile Exchange, WTI crude for January delivery was trading at $95.23 per barrel at 7:17 GMT, losing 0.23% on a daily basis, after touching $95.44 per barrel on Thursday, or the highest close for a front-month contract since October 31st. Fridays trading range was marked by a session low at $95.04 and a session high at $95.32. Oil futures were gaining 1.4% this week.

At the same time, on the ICE, Brent oil futures for January delivery were trading at $109.84 a barrel at 7:25 GMT, down 0.27% for the day, as yesterday they climbed as high as $110.22 per barrel. Prices held in a range marked by a session low at $109.81 and a session high at $110.17.

According to a report by the Department of Labor, the number of people who filed for unemployment assistance in the United States decreased by 21 000 to reach 323 000 during the week ending on November 16th 2013, or the lowest number since September. Expectations pointed that the number of claims will fall less, to 335 000. Last week contained a national holiday, as during such days the number of submitted claims is lower than usual. The average number of claims during the past four weeks, an indicator considered as lacking seasonal effects, dropped by 6 750 to 338 500.

On Wednesday the Energy Information Administration reported that crude stockpiles rose by 0.4 million barrels to 388.5 million, the highest level since June, and were well above the upper limit of the average range for this time of the year. The gain however was smaller than a predicted 1 million barrel increase according to the median estimate of 11 analysts surveyed by Bloomberg News.

The report also revealed that both motor gasoline and distillate fuel production decreased last week, averaging 9.3 and 4.9 million barrels per day, respectively. Motor gasoline inventories fell by 0.3 million barrels and matched analysts expectations, remaining above the upper limit of the average range for this time of the year. Distillate fuel stockpiles decreased by 4.8 million barrels last week, sharply exceeding projections for a drop of 280 000 barrels, and were near the lower limit of the average range.

Meanwhile, Iranian envoys and their counterparts from China, Russia, the United Kingdom, the United States and Germany are in Geneva for a third round of negotiations on the Islamic republic’s nuclear program in six weeks. Iran says that its atomic development is purposed for civilian energy and medical use and that the country has a right to enrich uranium for peaceful purposes. The United States and its allies, however, say that Iran is covertly looking to achieve nuclear-weapons capability.

A senior US official hinted on Friday that a deal with Iran was “quite possible” this week, but US Secretary of State John Kerry said on Monday he had no specific expectations about reaching an accord, which provided a certain support to oil prices.

Policymakers have said that a temporary agreement on confidence-building steps could be reached this week, spurring speculations for a possible return of more than 1 million bpd of Iranian oil to the global market in the near future.

Lastly, according to the International Energy Agency in Paris, the United States is expected to account for almost 21% of global oil demand during this year.

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