Crude slips with euro zone, economy concerns

NEW YORK (BestGrowthStock) – Crude oil futures prices edged lower on Thursday after mixed U.S. economic data and as investors eyed ongoing concerns about the euro zone debt woes that overshadowed the large drop in crude stocks last week.

The euro edged up ahead of a European Union summit, but the single currency was vulnerable to a sell-off on lingering euro zone peripheral debt concerns, while the dollar fell after a pause in U.S. Treasury yield gains.

Government data on Wednesday showed the biggest weekly drop in U.S. crude inventories in eight years, much more than the drop expected by analysts. But brokers and analysts noted that end-of-year tax considerations create an incentive for companies to lower inventories as the new year approaches, and stockpiles could rebound early in 2011.

Also a factor in oil markets was the approaching expiration of the ICE Brent January contract on Thursday.

FUNDAMENTALS

* On the New York Mercantile Exchange, January crude fell 25 cents, or 0.3 percent, to $88.37 a barrel at 9:09 a.m. EST (1409 GMT), trading from $87.94 to $88.65.

* Around the globe, the weather has become extreme, pushing prices higher for commodities ranging from sugar and wheat to heating oil and orange juice.

* U.S. housing starts rose slightly more than expected in November, but a surprise drop in permits for future home construction to a 1-1/2-year low indicated continued weakness in the housing market, even as the economic recovery gains traction.

* U.S. initial jobless claims fell slightly last week.

* The U.S. current account gap widened more than expected in the third quarter, and the deficit was the largest as percentage of GDP since the fourth quarter of 2008.

MARKETS NEWS

* U.S. stock index futures held slight gains on Thursday after government data showed initial jobless claims were essentially unchanged while housing starts and permits painted a mixed picture.

* European stocks shed early gains and peripheral euro zone bonds dipped after Spain paid a high premium at a debt auction. The Euro edged up ahead of a European Union summit.

* Gold gained ground in step with the euro.

UPCOMING DATA/EVENTS

* U.S. Energy Information Administration natural gas storage data at 10:30 a.m. EST (1530 GMT) on Thursday.

* ICE Brent January crude contract expires on Thursday.

* The NYMEX January crude contract expires on December 20.

* NYMEX crude oil for January fell 25 cents to $88.37 a barrel by 9:09 a.m. in volume of 42,994 lots.

(Reporting by Robert Gibbons; Editing by Walter Bagley)

Crude slips with euro zone, economy concerns