Crude oil futures hover close to USD81 on ECB liquidity move

Forex News – Crude oil futures rose to a four-day high on Thursday, after the European Central Bank announced measures to boost liquidity to euro zone lenders, boosting market sentiment.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in November traded at USD80.67 a barrel during U.S. morning trade, rallying 1.25%.

It earlier rose by as much as 1.8% to trade at USD81.14 a barrel, the highest price since September 30.

In his final press conference as president of the ECB, Jean-Claude Trichet said the central bank will advance new loans to banks with maturities up to 13 months, in an effort to shore up the region’s struggling banking sector.

The ECB will also launch a new EUR40 billion covered-bond buying program in November, saying that the measures "will continue to ensure that euro-area banks are not constrained on the liquidity side."

The announcement came after the ECB left its benchmark interest rate unchanged at 1.5%.

The news saw the euro climb to a four-day high against the U.S. dollar, while the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.37% to trade at 79.14.

Oil prices typically strengthen when the U.S. currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.

Also Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits last week rose by 6,000 to a seasonally adjusted 401,000, beating expectations for an increase to 411,000.

Oil traders have been paying close attention to readings on U.S. employment levels for signs that people are returning to work, thus driving more and using more energy.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for November delivery advanced 0.41% to trade at USD103.16 a barrel, up USD22.49 a barrel on its U.S. counterpart.

Oil traders continued to monitor developments in Libya in order to asses how quickly oil production in the country would return to pre-war levels.

The largest international oil producer operating in Libya, Eni SpA said it feared its largest oilfield in the North African nation might be in ruins, dampening hopes for an early return of Libyan supplies to the market.

"We cannot promise the field will start producing before the end of the year. Gaddafi's militia destroyed everything," Eni operations manager Mustafa Abougfeefa said.