U.S. oil falls on economic data, Brent up at expiry

By Robert Gibbons

NEW YORK (BestGrowthStock) – U.S. oil prices ended slightly lower on Thursday as a stronger dollar and mixed U.S. economic data outweighed robust data from China.

Front-month U.S. crude for May delivery fell 33 cents, or 0.38 percent, to settle at $85.51 a barrel. The market had ended 2 percent higher the previous day, and rose again in early trade after China posted strong growth in the first quarter.

“We are looking at the data from China and this is very supportive for the market,” said Christophe Barret, oil analyst at Credit Agricole Corporate and Investment Bank. “But I think the growth was anticipated and was already in the prices.”

In London, Brent crude futures ended up sharply as the front-month May contract expired on Thursday, even as the approaching expiration of May crude oil options helped keep U.S. oil prices curbed, sources said.

ICE Brent crude for May rose $1.02 to settle at $87.17, highest close since front-month Brent ended at $90.25 on October 3, 2008. Brent’s $87.58 intraday peak was the highest since $87.99 was struck on October 7, 2008.

Brent traded at a premium to U.S. benchmark West Texas Intermediate crude a fourth consecutive day due partly to the approaching contract expiration and traders also cited rising stockpiles at the Cushing, Oklahoma, delivery point for WTI, among other factors.

At settlement on Thursday, the Brent futures premium to WTI of $1.66 was the highest since mid-December.

A strike by Gabon’s main oil union has cut about 60 percent of the African nation’s 250,000 barrels per day of crude production, which competes with Brent.

The euro fell (Read more about the trembling euro. ) against the dollar, snapping five straight days of gains, on concern about how Greece will manage its debt, helping offset the negative impact earlier of strong Chinese data on the greenback. (USD/: )

A stronger dollar can pressure oil as it raises dollar-denominated commodity prices for buyers using other currencies.

China posted unexpectedly strong annual growth of 11.9 percent in the first quarter, but the surging growth could prompt a revaluation of the yuan, which may boost oil demand by increasing China’s buying power.

An unexpected 24,000 jump in the number of U.S. workers filing new jobless benefit claims tempered sentiment, but an expansion in New York state manufacturing to a six-month high kept optimism about the economy bolstered.

Oil traders have been watching for signs of a turnaround in the U.S. economy that could bolster oil demand, which was hard hit by the recession.

SURPRISE DROP

Oil prices rose 2 percent on Wednesday, ending a five-day losing streak after U.S. government data showed a surprise 2.2 million-barrel drop in U.S. crude stocks. But the report also showed a larger-than-expected 1.1 million barrel rise in distillate stocks, raising questions about the pace of the U.S. exit from recession. (EIA/S: )

On a technical basis, prices may be due for a small correction on Thursday but upward momentum is expected to stay intact.

OPEC has noted oil’s jump to 18-month highs. Kuwait’s oil minister said Thursday that OPEC would make a decision on an output boost if prices moved above $100.

On Tuesday, OPEC delegates said a price above $90-$95 would prompt the group to consider raising output.

But Venezuela’s oil minister said on Thursday that OPEC will not increase output to bring down prices, as stocks are high because demand is low and additional output would only end up in storage.

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(Additional reporting by Gene Ramos in New York, Emma Farge in London and Alejandro Barbajosa in Singapore; Editing by David Gregorio)

U.S. oil falls on economic data, Brent up at expiry