MW: Oil declines on economic data, stronger dollar
By Moming Zhou & Polya Lesova, MarketWatch
NEW YORK (MarketWatch) -- Crude futures declined on Thursday, as data showed first-time claims for unemployment benefits rose to the highest level in a month and as the U.S. dollar rebounded against other major currencies.
The number of initial claims in the week ending Oct. 17 rose 11,000 to 531,000, the highest level since the week ended Sept. 26, the Labor Department reported. The dollar gained back some ground after sinking to a fresh 14-month low against the euro.
On the New York Mercantile Exchange, crude oil for December delivery fell 58 cents, or 0.7%, to $80.79 a barrel on the. It dropped to $79.90 earlier.
"It is becoming almost imperative to trade the commodity markets from the perspective of the dollar these days, as nothing else seems to count for very much," said Edward Meir, senior commodity analyst at MF Global, in a note to clients.
In recent trading, the dollar index (DXY 75.40, +0.43, +0.58%) , which measures the performance of the greenback against a basket of other major currencies, rose 0.6% to 75.443. A stronger dollar tends to push down dollar-denominated commodities prices. See Currencies.
The dollar slumped to a fresh 14-month low versus the euro on Wednesday, with the European currency tapping the key level of $1.50.
Meir cautioned against chasing the current bounce in commodity prices, saying that most markets are overbought at current levels and are prone to a technical correction.
Elsewhere in energy, November gasoline futures lost 1.2% to $2.0298, and November heating oil slid 0.4% to $2.0975.
November natural gas lost 0.5% to $5.075 per million British thermal units.
The Energy Information Administration is scheduled to report on Thursday natural-gas inventory data. Analysts polled by Platts project a net gas storage injection between 16 billion cubic feet and 20 Bcf for the week that ended Oct. 1.
The United States Oil Fund (USO 41.35, +0.02, +0.05%) was almost flat, and the United States Natural Gas Fund (UNG 11.70, -.00, -.00%) slid 0.3%.
Separately, the Organization of Petroleum Exporting Countries will increase its output quota in December if inventories fall, oil prices remain strong and the global economy grows, the group's secretary general said Thursday, according to the Dow Jones Newswires.
OPEC, which accounts for about a third of the world's oil production, has been raising its output in six straight months starting from April.
The cartel set the quota of 24.845 million barrels a day at the beginning of this year, but has never reached that target.
The 11 members bound by production quotas produced 26.4 million barrels a day of crude in September, according to OPEC monthly data, driving the compliance rate to below 63%.
