By Thursday evening...: European oil prices showing signs of recovery

Reuters  Nick Oxford FILE

"The impact on oil prices will depend on (the) extent of supply disruption versus available spare capacity, global oil inventories and reaction to oil price from US producers", the bank said in a commodities research note.

Iran fired missiles at military bases housing US troops in Iraq on Wednesday in response to Soleimani's killing. The report showed the US economy created a smaller-than-expected 145,000 jobs in the final month of 2019, while the unemployment rate was unchanged at 3.5%.

Japan's Nikkei rose 1.8%, lifting stocks to their highest for the year so far, while Australian stocks climbed 1% to just below December's record high.

The U.S. House of Representatives voted Thursday to limit President Donald Trump's authority to strike Iran, while America received indications that the Islamic Republic has asked militias in the Middle East not to carry out attacks against U.S. interests, Vice President Mike Pence said in comments to Fox News.

Trump announced economic sanctions on Iran but did not give details.

But oil prices may find support in coming months due to improving fundamentals as the United States seems to have "plateaued on production, and OPEC is sticking with its cuts", said Phil Streible, chief market strategist at Blue Line Futures in Chicago. The S&P 500 .SPX gained 21.65 points, or 0.67%, to 3,274.7 and the Nasdaq Composite .IXIC added 74.18 points, or 0.81%, to 9,203.43.

According to market data from the Energy Information Administration (EIA) crude oil stocks on Wednesday were up by 1.2 million barrels in the first week of January to reach 431.1 million barrels. Oil prices later pared losses to trade near break-even.

Wednesday's disclosure from the Energy Information Administration that crude and gasoline inventories in the USA rose unexpectedly last week resulted in traders putting geopolitical hostilities in the back seat and causing global benchmark Brent to settle down 39 cents to $64.98.

Another safe currency, the Swiss franc, also fell against both the dollar and the euro.

Greater risk appetite was also evident in emerging markets. The benchmark 10-year note US10YT=RR rose 6/32 in price to yield 1.8545%.

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