Dubai: Crude oil fell to a six-week low last week as rising US jobless claims bolstered concern that the economic recovery in the biggest oil-consuming nation is faltering.
Oil slipped 1.3 per cent a day on Friday after the Labour Department said weekly claims for unemployment benefits climbed to the highest level since November. Total US inventories of crude and fuel reached the highest level since at least 1990 last week, according to an Energy Department report.
“We took out our recent lows because of more bad US economic news,” said Tom Bentz, a broker with BNP Paribas Commodity Futures Inc. in New York. “Inventories are at 20-year highs, and the prospects for demand growth are fading. Prices are still too high given the fundamentals.”
Crude oil for September delivery fell 97 cents (Dh3.5) to expire at $73.46 a barrel on the New York Mercantile Exchange, the lowest settlement since July 6. Oil declined 2.6 per cent this week. The more actively traded October contract slipped 95 cents to settle at $73.82 a barrel.
Brent crude for October settlement dropped $1.04, or 1.4 per cent, to end the session at $74.26 a barrel on the London- based ICE Futures Europe Exchange.
US initial jobless applications rose by 12,000 to 500,000 last week, yesterday’s Labour Department data showed. Claims exceeded all estimates from economists polled by Bloomberg News.
The Federal Reserve Bank of Philadelphia said yesterday that its general economic index slipped to minus 7.7 this month, signalling contraction in the area covering eastern Pennsylvania, southern New Jersey and Delaware.
The Standard & Poor’s 500 Index declined 0.4 per cent to 1,071.69 at 4.03pm. The Dow Jones industrial Average dropped 0.6 per cent to 10,213.62.
The dollar climbed to the highest level in five weeks against the euro after European Central Bank council member Axel Weber said the region’s economy may need help from the central bank through the end of the year.
The greenback rose 0.9 per cent to $1.2709 per euro, after touching $1.2664, the strongest since July 13.
“You certainly see an overhang developing in oil product stocks in the US,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA. “Gasoline demand has witnessed a difficult recovery from its recession-induced lows, and one of the main stumbling blocks for this has been high US unemployment.”
Originally Appeared On: https://gulfnews.com/business/oil-gas/crude-plunges-to-six-week-low-1.671327