New York - Oil prices spiked nearly $3 higher on Thursday, an outsized gain that possibly reflected traders being caught in a squeeze as gas prices dropped, as well as support from an ECB rate cut and good US jobs data, traders said.
In New York, West Texas Intermediate crude for June delivery soared $2.96 to finish the official session at $93.99 a barrel.
London's Brent North Sea contract for June added $2.90 to $102.85 a barrel.
The jump in prices reversed sharp losses on Wednesday tied to gloomy economic data.
The European Central Bank's quarter-point reduction in its benchmark interest rate, to a record low of 0.50 percent, was expected but it provided the underpinnings of a rally in oil.
Also helping was the weekly US jobless claims report, which came in much better than expected, suggesting some tightness in the jobs market.
But the main boost to prices, a $1.75 vertical jump in New York's WTI benchmark futures contract, came hours after those announcements and followed a similar spike downward in natural gas prices.
Rich Ilczyszyn of iiTRADER said the oil-price spike could relate to a hedge fund being forced to unwind WTI short positions after being surprised by the natural gas price drop, which followed a report of a climb in gas stockpiles.
“We hear that somebody was unwinding a long-natural gas short-WTI spread,” he said.
“Hedge funds are always looking for angles and trading relationships and putting on positions against other positions to reduce overall market risk, and the net-long natural gas play is kind of reaching an end.” - Sapa-AFP