* U.S. jobless claims fall, supportive for oil
* Dollar dips, spurs risk appetite for commodities
* Coming up: US preliminary Q2 GDP; 8:30 a.m. EDT Friday
* Coming Up: Bernanke's speech at 10 a.m. EDT Friday
(Recasts, updates with graph on NYMEX crude oil contango)
By Gene Ramos
NEW YORK, Aug 26 (Reuters) - Oil advanced for a second day
on Thursday after a modest improvement in U.S. jobs data eased
some concerns about the economy.
The Labor Department reported that first-time filings for
U.S. claims for unemployment benefits fell more than expected
last week, though the four-week filings average rose to the
highest level since late November. []
Benchmark U.S. crude futures for October <CLc1> settled at
$73.36 per barrel, up 84 cents, or 1.16 percent, getting an
additional boost from a weaker dollar. October crude touched a
session high of $73.98, up $1.46.
The rally began on Wednesday, when crude closed up more
than 1 percent, rebounding after sinking early to the lowest
level since early June on data showing U.S. crude and product
supplies rose last week to post a new high. []
Crude futures volume on Thursday was heavy, at more than
700,000 lots, and the market stayed in positive territory for
the day, unlike Wall Street, where the stock market slumped as
early gains on the jobless claims data fizzled. []
Later month contracts traded up even stronger, in reaction
to bloated inventories, analysts said. This widened the
contango, in which prompt futures trade at a discount to later
months.
"The contango is widening and that is a logical reaction to
inventories building up so much as it is more economical to
store," said Dominick Chirichella, senior partner at Energy
Management Institute in New York.
Analysts said further support for the widening contango,
came from the looming autumn refinery maintenance season, when
crude demand typically ebbs before picking up for the winter.
ICE Brent <LCOc1> ended up $1.54, or 2.1 percent, at
$75.02, also rising for a second day. Brent's premium against
the U.S. benchmark crude went as high as $1.80, the highest
since June 3. This reflects better-balanced Brent supplies than
those in the U.S., according to analysts. (Graphic:
http://link.reuters.com/nuj57n )
Support for oil futures came early as the dollar <.DXY>
fell against a basket of currencies. A weaker dollar often
supports commodities priced in the U.S. currency.
"The dollar's weakness is lending support to crude futures
today and gains reflect a follow-through from the breakout from
11-week lows yesterday," said Tom Knight, trader at Truman
Arnold, in Texarkana, Texas.
"This is a technical bounce after recent weakness (and) an
improved cash market in the Gulf Coast, due to some refinery
turnarounds, is also helping in this relief rally," he added.
Front-month U.S. crude futures' 14-day relative strength
index (RSI) fell to just 30 on Tuesday, a technical pointer to
oversold conditions, but has since bounced to around 40,
Reuters data show, partly on profit-taking from short
positions. (Graphic: http://link.reuters.com/fuc57n )
However, oil's two-day gains "has all the hallmarks of an
upside correction or retracement in an otherwise falling
market," brokers at PVM Oil Associates in London said.
Investors await a gathering of central bankers from around
the world on Thursday at the Jackson Hole, Wyoming, mountain
resort to assess the darkening economic outlook.
In a speech on Friday, U.S. Federal Reserve Chairman Ben
Bernanke is likely to discuss the uncertain prospects for the
economy, but isn't expected to give many clues about whether
the central bank will pump more cash into the economy to keep
the recovery going. []
Also being awaited, the U.S. government on Friday is
expected to revise second-quarter gross domestic product growth
lower to an annual pace of 1.4 percent, from 2.4 percent,
according to a Reuters survey.
The U.S. Energy Information Administration on Wednesday
said that U.S. crude and product inventories all rose last
week. In total, commercial crude and product stocks rose to
1.139 billion barrels, topping the record weekly high of 1.13
billion barrels set in the week to Aug. 13. []
(Additional reporting by Robert Gibbons in New York;
Christopher Johnson in London; Alejandro Barbajosa in
Singapore; Editing by David Gregorio)
