NEW YORK (MarketWatch) -- Crude futures rose Thursday to above $70 a barrel, pacing broad gains in commodities with gold futures hitting another record, as dollar weakness and rising U.S. stocks markets attracted investors into the commodities markets.
U.S. stocks moved broadly higher Thursday, boosted by a surprising profit by Alcoa Inc. (AA 14.67, +0.47, +3.31%) and declining weekly jobless claims. Meanwhile, government data showed U.S. natural gas inventories rose last week to a new record high.
Crude oil for November delivery rose 45 cents, or 0.7%, to $70.02 a barrel on the New York Mercantile Exchange. The contract earlier hit an intraday high of $70.58 a barrel but also fell as low as $69.17.
"Crude wants to move lower but it cannot, as the dollar gets hammered," said Phil Flynn, vice president at futures trading and research firm PFG BEST Research. However, "any upturn in the dollar should smash petroleum prices."
In currencies trading, the dollar slipped against major counterparts after the European Central Bank and the Bank of England made no policy changes. The dollar index (DXY 76.08, -0.42, -0.55%) was down 0.5% to 76.094, just slightly higher than the one-year low hit about two weeks ago. See full story.
Dollar weakness typically boosts dollar-denominated commodities such as oil because it makes them cheaper for holders of other currencies.
The Labor Department said initial claims for state unemployment benefits fell by 33,000 to a seasonally adjusted 521,000 in the week ending Oct. 3. Economists surveyed by MarketWatch expected a smaller decline, to 540,000.
Crude rose "as the dollar depreciated and as equity markets rose following positive corporate results from the U.S. which boosted optimism about a future demand recovery in the energy markets," wrote Nimit Khamar, analyst at Sucden Financial Research, in a note to clients.
Thursday's gain came after oil fell nearly 2% Wednesday as government data showed a bigger-than-expected buildup in U.S. gasoline inventories last week, as demand remained largely unchanged while both production and imports of the fuel rose. See full story. See full story.
Oil will be trading between $65 and $75 a barrel, "with all the usual variables seeing to it that this band stays intact for at least a little while longer," Edward Meir, an analyst at MF Global, predicted.
Also in energy trading, November reformulated gasoline rose 2.47 cents, or 1.4%, to $1.745 a gallon. November heating oil gained 1.52 cents, or 0.9%, to $1.7963 a gallon.
November natural-gas futures rose 10.8 cents, or 2.2%, to $5.012 per million British thermal units.
U.S. natural gas inventories rose 69 billion cubic feet in the week ended Oct. 2 to hit a new record high, the EIA reported Thursday. Analysts polled by Platts expected an addition of between 59 Bcf and 63 Bcf.
