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U.S. oil extends losses to hit 6-week low after jobless claims data

Published 05/01/2014, 09:05 AM
U.S. oil hits 6-week low after disappointing jobless claims data

Investing.com - U.S. oil futures extended losses to hit a six-week low on Thursday, after data showed that the number of people who filed for unemployment assistance in the U.S. last week rose to a nine-week high.

On the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in June fell to a daily low of $98.76 a barrel, the weakest level since March 21.

Nymex oil last traded at $99.09 a barrel during U.S. morning hours, down 0.65%, or 65 cents a barrel. Prices lost 1.52%, or $1.54, on Wednesday to settle at $99.74.

Futures were likely to find support at $98.26 a barrel, the low from March 21 and resistance at $100.76 a barrel, the high from April 30.

The U.S. Department of Labor said the number of individuals filing for initial jobless benefits increased by 14,000 to a seasonally adjusted 344,000 last week. Analysts had expected jobless claims to fall by 11,000 to 319,000 last week.

A separate report showed that U.S. personal spending increased more than expected in March, while personal income figures also topped forecasts.

Data released Wednesday showed that the U.S. economy grew at an annual rate of 0.1% in the first three months of the year, well below forecasts for an expansion of 1.2%.

The Federal Reserve said Wednesday it would reduce its bond purchases by $10 billion to a total of $45 billion a month, in a widely expected decision.

The U.S. central bank acknowledged that first quarter growth was far weaker than expected, but added that momentum had started to pick up in recent weeks.

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Meanwhile, investors remained concerned over record-high U.S. crude supply levels.

The U.S. Energy Information Administration said in its weekly report Wednesday that crude oil inventories rose by 3.52 million barrels last week to hit an all-time high of 399.4 million barrels.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for June delivery fell 1.03%, or $1.11, to trade at $106.96 a barrel, while the spread between the Brent and U.S. crude contracts stood at $7.87 a barrel.

Data released earlier showed that China’s official manufacturing purchasing managers’ index inched up to 50.4 in April, just below an expectation of 50.5, and higher than the 50.3 reported last month.

The Asian nation is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.

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