Oil falls near 1 pct on dollar, housing data

By Edward McAllister

NEW YORK (BestGrowthStock) – Oil fell nearly 1 percent toward $80 a barrel on Thursday as the dollar strengthened and some weak economic data soured sentiment after crude hit a seven-week high on Wednesday.

The euro fell (Read more about the trembling euro. ) versus the dollar on Thursday as comments by the European Central Bank reinforced the view interest rates in the region will remain low in the foreseeable future.

A stronger dollar tends to pressure oil because it makes dollar-denominated commodities more expensive for other currency holders.

Meanwhile, pending sales of existing U.S. homes fell more than expected in January, according to the National Association of Realtors, casting a shadow over some earlier positive economic data in the world’s largest energy consumer.

Benchmark U.S. crude oil futures for April fell 66 cents to settle at $80.21 per barrel. The contract reached a peak of $81.23 on Wednesday, its highest intraday point since January 12, as gasoline prices hit the highest level since October 2008.

London ICE Brent for April fell 71 cents to settle at $78.54 a barrel.

“The market was not responding well to the positive economic reports. Now home sales data is weighing. Once again the market is in $80/$81 range and can’t sustain a rally,” said Tom Bentz, broker at BNP Paribas Commodity Futures Inc in New York.

Crude oil prices have been trading in a tight range between $78 and $81 a barrel in recent days, balking when prices try to make a break to the upside. Crude oil’s trading range: http://link.reuters.com/bux23j A report from energy industry data provider Genscape showed oil inventories at the key U.S. crude oil hub at Cushing, Oklahoma, — the delivery point for the U.S. oil futures contract — rose by 911,583 barrels to 31.74 million barrels in the week to March 2.

Earlier, data showed that U.S. jobs claims fell last week, the Labor Department said on Thursday. A separate report from the Commerce Department showed orders received by U.S. factories rose 1.7 percent in January after a 1.5 percent increase in December.

The market is waiting for closely-watched U.S. non-farm payroll data on Friday at 8:30 a.m. EST (1330 GMT) for any potential sign of economic recovery.

Friday’s employment report is expected to show a loss of 50,000 jobs in February, compared with 20,000 job cuts in January, according to economists polled by Reuters.

But some market watchers said that an even greater number of job losses are already priced in to the oil market.

Reports of an attack on an oil facility in Nigeria gave some support to prices on Thursday, raising worries over production from the Niger Delta after a period of relative calm.

A militant faction in Nigeria’s restive Niger Delta said it blew up an oil manifold operated by Italy’s Agip (ENI.MI: ) on Wednesday. There was no immediate independent confirmation.

The attack would be the second in as many days in the Delta, where an amnesty program last year brought more than six months of peace.

China Investment Corp (Read more about U.S. companies investment into China), the country’s sovereign wealth fund, believes commodity prices are outpacing the global economic recovery, fueled by loose monetary policies, a top official said on Thursday.

“Personally, I think the prices are a bit too high, relative to the strength of real economic recovery,” Jesse Wang, CIC executive vice president and chief risk officer, said on the sidelines of a conference in Beijing.

A potentially bearish sign for crude demand came on Wednesday when the Energy Information Administration said U.S. crude inventories rose by a larger-than-expected 4.1 million barrels last week, while gasoline stocks also increased, raising questions about U.S. energy demand. (EIA/S: )

Balancing those figures were data showing total U.S. oil demand grew 0.3 percent in the past four weeks from a year earlier, raising expectations for an end to a 1-1/2 year period of sustained consumption decreases.

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(Additional reporting by Robert Gibbons and Gene Ramos in New York, Christopher Johnson in London; Editing by John Picinich and Rebekah Kebede)

Oil falls near 1 pct on dollar, housing data