MW: Crude futures fall after data shows rise in jobless claims
By Polya Lesova, MarketWatch
NEW YORK (MarketWatch) -- Oil futures fell on Thursday after their sharp rally in the previous session, as data showing a rise in jobless claims rekindled concerns about the economy.
Crude for September delivery fell 38 cents to $72.04 a barrel in electronic trading on Globex. The September crude contract will expire on Thursday.
October oil futures, which registered more volume, dropped 63 cents, or 0.9%, to $73.20 a barrel on Globex.
Weighing on oil prices was a report by the Labor Department which showed that initial claims for state unemployment benefits rose by 15,000 to 576,000 in the week ended Aug. 15.
It was the highest level since July 25. The four-week average of initial claims also rose, by 4,250 to 570,000, and continuing claims climbed as well.
Negative economic news tends to pressure oil prices, because they dampen hopes of a quick recovery in the global economy and energy demand.
Oil prices soared 4.7% on the New York Mercantile Exchange Thursday boosted by an unexpected drop in inventories and a rise in U.S. equities. See full story.
"The significant rally we have seen in energy prices on Wednesday is somewhat justified in light of the strong API/EIA data," said Edward Meir, analyst at MF Global.
"However, considering that we have had a $7 high-to-low move in crude in less than a week, we suspect the market will have trouble pushing much higher, particularly in light of the fact that old resistance levels are now once again in play," Meir wrote in a note to clients.
The Energy Information Administration said Wednesday that crude stocks fell by 8.4 million barrels last week in contrast to analyst expectations of a rise in supplies. The American Petroleum Institute said Tuesday that crude supplies declined by 6.1 million barrels.
Also on Globex, September reformulated gasoline fell 0.2% to $2.03 a gallon and September heating oil dropped 0.9% to $1.9023 a gallon.
September natural gas futures were little changed near $3.121 per million British thermal units.
The EIA is scheduled to report data on natural-gas supplies on Thursday morning.
IHS Global Insight is projecting a storage build of 55 billion cubic feet for the week ended Aug. 14. Analysts polled by Platts expect an addition of between 51 and 55 billion cubic feet.
Natural-gas prices may fall below $3 per million British thermal units "for the first time in seven years, should the above-average build-up in inventories have continued last week, fuelling concerns that the storage capacity will be exhausted later this year," wrote analysts at Commerzbank in a note to clients.
