Oil dips, U.S. jobless data outweighs stock drop

By Gene Ramos

NEW YORK (BestGrowthStock) – Oil prices fell back below $83 a barrel on Thursday as weak U.S. jobless claims data and losses on Wall Street outweighed an unexpected drawdown in U.S. crude stocks and a moderate decline in fuel inventories.

Prices vacillated through the day, briefly topping $84 for the third time in seven sessions, before succumbing to falling equity markets amid a mix of factors, including the dollar’s fall to a 2010 low, OPEC’s decision to maintain production quotas and ongoing French port and refinery strikes.

Oil prices broke out of this year’s $70 to $80 range last month as traders anticipated a fresh round of U.S. Federal Reserve monetary easing that would boost growth prospects and cut unemployment, but are now stalling around $80 to $85 a barrel as the market weighs immediate economic conditions against future policy.

Data released early Thursday showed that new claims for jobless benefits unexpectedly rose last week, weighing on crude prices even as they bolstered the case for the central bank to pump more money into the economy as soon as next month.

U.S. crude for November delivery fell 32 cents to $82.69 a barrel amid total trading volume of 675,000 lots, according to preliminary data. In London, ICE November Brent crude expired at the close and settled down 11 cents at $84.53 a barrel.

“The weekly EIA report appeared slightly bearish from our vantage point as stocks drew slightly across the board and the declines fell a bit short of our expectations,” said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois. “The complex decoupled from the currency factor today and appeared to latch onto a weakening stock market for guidance.”

CRUDE, PRODUCT STOCKPILES DOWN

U.S. crude inventories dipped by 416,000 barrels last week, the U.S. Energy Information Administration said, far below the 4.1-million-barrel drawdown reported by the American Petroleum Institute on Tuesday, but against the forecast in a Reuters poll for a 1.1-million-barrel increase.

Gasoline stocks fell by 1.8 million barrels, more than expected, while distillate supplies, which include heating oil and diesel, dropped by 255,000 barrels, less than forecast.

Oil prices got early support from the U.S. dollar’s fall to its lowest level this year against a basket of currencies. while the euro rose to an eight-month high. By 3:25 p.m. EDT (1925 GMT), the dollar was down 0.61 percent against the basket (.DXY: ).

A weak dollar usually lifts oil prices as it makes dollar-denominated crude cheaper for buyers using other currencies, lowering the value of greenbacks paid to producers and attracting investors looking to shift from currencies to commodities.

The oil market was awaiting Friday’s U.S. government data on consumer prices last month. Also scheduled were data on retail sales in September and a preliminary reading of consumer sentiment so far this month.

Also on tap on Friday was a speech by Fed Charman Ben Bernanke in Boston that could provide clues on what monetary authorities are planning to do next.

OPEC DECISION

Oil prices were little moved by the decision by the Organization of the Petroleum Exporting Countries to keep oil production levels unchanged, sticking to a policy that has served it well for nearly two years.

“The biggest challenge we have is to keep the oil market as it is today,” Saudi Arabian Oil Minister Ali al-Naimi said.

A strike at Fos Lavera port in France entered its 18th day on Thursday — the longest at the key Mediterranean oil port — while workers at most refineries were also on strike as part of stoppages across the country that began on Tuesday over government pension reforms.

(Additional reporting by Robert Gibbons in New York, Christopher Johnson and Emma Farge in London, and Alejandro Barbajosa in Singapore; Editing by Walter Bagley)

Oil dips, U.S. jobless data outweighs stock drop