U.S. crude futures rose Thursday, helped by gains in stock markets and fuel products that pushed oil to the highest settlement in three weeks.
Light, sweet crude for June delivery settled 43 cents higher at $104.55 a barrel on the New York Mercantile Exchange, the highest settlement price since April 2. Brent crude on the ICE futures exchange settled 80 cents higher at $119.92 a barrel.
Oil prices were lifted by a rise in stock markets, which have served as a proxy for oil traders trying to gauge economic growth, and fuel demand. Better-than-expected housing data trumped a disappointing report on U.S. jobless claims, and sent the Dow Jones Industrial Average 0.9% higher to recently trade at 13,212.
As Iran worries have moved to the back of investors' minds, the state of the global economy has become the main driver of oil prices in recent weeks. On Friday, the Commerce Department is due to report U.S. gross domestic product growth, which could help to knock crude out of its recent trading range.
"GDP is going to be big," said Rich Ilczyszyn, a broker at IITrader in Chicago. "Commodity guys are kind of sitting here biding time...we're going to be very, very sensitive to outside market influence."
U.S. oil prices initially dipped Thursday following the release of data from the Labor Department showing that new claims for unemployment benefits remain elevated. But as stocks rallied and Europe's Brent crude aimed higher, its counterpart on the Nymex rebounded. A rise in gasoline futures also helped to pull oil futures higher.
Walter Zimmermann, chief technical analyst at United-ICAP, said that technical analysts suggested Nymex crude should continue to rally towards $107 a barrel as traders move to unwind bearish bets, a process known as short covering.
"When a market gets oversold and needs to correct, you don't really need news for the rebound," Zimmermann said.
On Wednesday, crude received a late-session boost when the Federal Reserve raised its outlook for 2012 U.S. economic growth. But the Fed also lowered slightly its outlook for 2013 and 2014.
Front-month May reformulated gasoline blendstock, or RBOB, settled 2.76 cents, or 0.9%, higher at $3.1833 a gallon. May heating oil settled 3.33 cents, or 1.1%, higher at $3.1944 a gallon.