U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are surging late Thursday, bolstered by strong U.S. economic data that offset investors’ concerns about the potential for a rise in Iranian supplies. Traders are also betting that the start of driving season in the United States and Europe would lead to increased demand for gasoline. Meanwhile, a jump in air travel is helping to drive up demand for distillates like jet fuel.

At 19:32 GMT, July WTI crude oil is trading $66.84, up $0.63 or +0.95% and August Brent crude oil is at $69.19, up $0.46 or +0.67%.

After posting a flat-to-lower trade early in the session on Iranian supply concerns, prices began to firm following the release of solid U.S. economic news.

The number of Americans filing new claims for unemployment benefits dropped more than expected last week as layoffs subsided, with companies desperate for workers to meet surging demand unleashed by a rapidly reopening economy.

Initial claims for state unemployment benefits fell 38,000 to a seasonally adjusted 406,000 for the week-ended May 22, the Labor Department said. That was the lowest since mid-March 2020 and marked the fourth straight weekly decline in applications.

In a separate report on Thursday, the Commerce Department confirmed that gross domestic product increased at a 6.4% annualized rate last quarter. The unrevised estimate followed a 4.3% growth rate in the fourth quarter.

After last week’s setback was fueled by talk of a deal between the United States and Iran to end the sanctions against the rogue nation, the trade has been cautious but to the upside as most traders now believe that increasing global demand will offset any rise in supply over the long-run. Furthermore, traders also believe that OPEC and its allies have the ability to adjust production levels to cancel the increased supply should the need arise.

The on-going talks between the U.S. and Iran will be the hot topic next week at the June 1 meeting of OPEC+. The producers will have to assess whether to change plans for easing production curbs against the prospect of additional Iranian supply.

Story continues

Late in the session on Thursday, the main trend remained down, but momentum shifted to the upside. This puts the markets in a position to challenge recent highs.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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