Crude soars on strong U.S. jobs and factory reports

U.S. crude oil prices soared on Thursday after better-than-expected factory and jobs reports hit the wire in the U.S. earlier, while improving Chinese output figures bolstered prices as well.

On the New York Mercantile Exchange, light sweet crude futures for delivery in September traded at USD107.48 a barrel during U.S. trading, up 2.33%. 

The September contract settled up 1.89% at USD105.03 a barrel on Wednesday.

In the U.S. earlier, the Institute of Supply Management said its widely-watched purchasing managers index rose to 55.4 in July from 50.9 in June, expanding at its fastest rate since April 2011 and well above market forecasts for a 52.0 reading. 

Separately, the Department of Labor said the number of individuals filing for initial jobless benefits in the week ending July 26 fell by 19,000 to 326,000. 

Analysts were expecting jobless claims to come in at 345,000. 

The numbers, the latest in a series of indicators that have beat expectations, painted a picture of a U.S. recovery that is gaining steam and will demand more oil and fuels going forward.

Improving manufacturing barometers outside of the U.S. fueled the rally as well.

London-based Markit reported earlier that the euro zone's manufacturing PMI rose to 50.3 in July, from a reading of 50.1 the previous month. Analysts had expected the index to remain unchanged last month.  

Meanwhile in China, a government report revealed that the country's manufacturing purchasing managers' index rose unexpectedly to 50.3 in July from 50.1 in June, beating expectations for a dip to 49.1.

A reading above 50.0 indicates industry expansion and below indicates contraction.

China is the world's second largest oil consumer after the U.S. 

On the ICE Futures Exchange, Brent oil futures for September delivery were up 1.43% at USD109.24 a barrel, up USD1.76 from its U.S. counterpart.