Crude gains on hopes for Cyprus rescue deal, U.S. data bolsters

Investing.com - Oil prices were up in U.S. trading on Friday on talk Greece may hike its stakes in Cypriot banks and contain the financial crisis in the island nation.

Oil still enjoyed support from better-than-expected U.S. jobless claims released Thursday.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded up 0.62% at USD93.02 a barrel on Friday, off from a session high of USD93.33 and up from an earlier session low of USD92.33.

News that Greece may help Cyprus contain its financial crisis, even if partially, fueled demand for oil, as a messy Cypriot exit from the eurozone could rattle the broader European economy and crimp demand for fuels and energy.

Cyprus's parliament is due to hold emergency meetings throughout the day to mull an ultimatum imposed by its eurozone neighbors and the International Monetary Fund to raise EUR5.8 billion necessary for a EUR10 billion bailout package.

Representatives from lending bodies originally called on Cyprus to raise the money by slapping a one-time tax on bank deposits, and proposals still remain on the table call for taxing bank accounts holding at least EUR100,000, which dampened relief rallies in energy and currency markets.

Cyprus must come up with a plan to raise EUR5.8 billion by Monday or risk seeing the European Central Bank halt the flow of emergency funding into its financial sector.

Better-than-expected U.S. economic indicators released Thursday bolstered oil as well.

The U.S. Department of Labor reported that the number of people filing for initial jobless benefits last week rose by 2,000 to a seasonally adjusted 336,000, below expectations for an increase of 8,000 to 342,000.

Manufacturing data in the U.S. beat expectations as well.

The Federal Reserve Bank of Philadelphia reported that manufacturing activity in the bank's jurisdiction expanded at its fastest pace in three months in March, with the Philly Fed manufacturing index rising to 2.0 from February’s reading of -12.5, far outpacing market calls for a -2.0 reading.

Elsewhere, the National Association of Realtors, meanwhile, reported that existing home sales rose 0.8% to 4.98 million units in February, the highest level in three years.

On the supply side of the market, OPEC, which accounts for 40% of global oil output, said it will trim shipments by 40,000 barrels per day to 23.72 million barrels a day for the weeks ending April 6, which pushed up prices as well.

Weaker-than-expected German business sentiment data, however, dampened the rally.

The Munich-based Ifo Institute for Economic Research reported earlier Friday that Germany's business climate index dropped to 106.7 in March from 107.4 in February, defying market expectations for a gain to 107.6.

Elsewhere on the ICE Futures Exchange, Brent oil futures for May delivery were up 0.06% at USD107.53 a barrel, up USD14.51 from its U.S. counterpart.