Oil rises on ECB's interest cut

U.S. crude oil price rose on Thursday as the European Central Bank (ECB) unexpectedly cut the key interest rate by 25 basis points. ECB cut its key interest rate to 1.25 percent from 1.5 percent. It was the first cut since May 2009. The markets had expected it to remain unchanged. Investors thought the rate cut would help the indebted bloc encounter the rising sovereign debt risks, which lifted the market sentiment. In Greece, Prime Minister George Papandreou backed off the referendum plan, saying if opposition supported the bailout package, he would consider to give up the vote. Although Papandreou has not totally ruled out the plan, markets were still hopeful for an easing debt situation in the region. The trading volume picked up. On the economic front, U.S. initial jobless claims fell 9,000 last week to 397,000. It was the first time for this number to dip below 400,000 since the end of September, indicating moderate improvement in the job market. And the dollar dropped about 0.5 percent against a basket of currencies, offering further support to dollar-denominated crude oil. Light, sweet crude for December delivery rose 1.56 dollars, or 1.69 percent to settle at 94.07 dollars a barrel on the New York Mercantile Exchange, after hitting an intraday high of 94.59 dollars. In London, Brent crude for December delivery also gained 1.49 dollars, or 1.36 percent to close at 110.83 dollars a barrel.