Oil prices rose to near $108 a barrel Thursday after new U.S. indicators underlined a modest recovery in the world's biggest economy.
By early afternoon in Europe, benchmark oil for October delivery was up 65 cents to $107.88 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell Wednesday by $1.31 to close at $107.23 a barrel.
As immediate concerns about political stability in the Middle East eased, the main focus was on market fundamentals and the releases of the major U.S. macroeconomic data.
The Labor Department released data Thursday showing applications for U.S. unemployment benefits fell to 323,000 last week, near their lowest level in 5 years and in line with trends indicating fewer layoffs and steady net job gains.
A jump in U.S. auto sales also helped brighten the outlook for oil consumption. General Motors and other U.S. carmakers posted strong sales in August, giving the auto industry its best month in six years.
"This is globally good for the U.S. economy although for gasoline demand it also translates into a fleet that should improve further its fuel efficiency," said Olivier Jakob of Petromatrix in Switzerland.
The Federal Reserve also said Wednesday that surveys showed moderate growth throughout the country.
Investors will later monitor fresh information on U.S. stockpiles of crude and refined products.