MW: Oil falls for third session on economic concerns
Oil futures fell Thursday for a third straight session as newly released U.S. jobs data highlighted concerns that deepening economic troubles in the world's biggest oil consuming country will further cut into energy demand.
Meanwhile, natural-gas futures extended losses after government data showed U.S. inventories fell less than expected.
The number of people collecting benefits in the week ended Dec. 27 rose to the highest level in more than 26 years, the Labor Department reported. Separately, the nation's major retailers cut their profit outlooks as job losses rose and consumer confidence weakened.
"With most of the world either at, or in, recession, the case for a sustainable rally in commodities looks unpersuasive," wrote Edward Meir, an analyst at MF Global, in a note.
Crude oil for February delivery was last down $1.23, or 2.9%, at $41.40 a barrel on the New York Mercantile Exchange. It fell to as low as $40.74 earlier.
Thursday's loss came after oil tumbled more than 12% in the previous session, the biggest daily loss in more than seven years, after government reports showed U.S. crude inventories jumped last week.
On Thursday, traders digested a fresh round of data that underscored strains facing the U.S. consumer.
The number of people collecting benefits in the week ended Dec. 27 rose 101,000 to 4.61 million -- the highest level since November 1982, the Labor Department reported Thursday. The four-week average of continuing claims rose 45,000 to 4.47 million -- the highest level since December 1982. See full story.
Wal-Mart Stores Inc. , the world's largest retailer, posted lower-than-expected December sales and cut its fourth-quarter profit forecast. Other retailers such as Macy's Inc. and Gap Inc. also cut their outlook. See full story.
The deteriorating economic troubles have cut into oil demand and raised inventories. U.S. stockpiles of crude reached 325.4 million barrels in the week ended Jan. 2, up 6.7 million barrels from a week ago, the Energy Information Administration reported. Analysts surveyed by energy information provider Platts had expected a buildup of 1.5 million barrels.
Crude inventories at Cushing, Okla., the delivery point for crude futures contracts traded on the Nymex, jumped 15% to reach 32.2 million barrels, the highest level since at least April 2004, when the government started collecting Cushing data.
"The stock build should be enough to chase the bulls back into the barn," said James Williams, an economist at energy research firm WTRG Economics.
Also on the Nymex, February reformulated gasoline fell 1% to $1.066 a gallon, while February heating oil lost 1% to $1.528 a gallon.
Natural gas
February natural-gas futures dropped 3.4% to $5.675 per million British thermal units.
U.S. natural-gas stockpiles declined 47 billion cubic feet in the week ended Jan. 2, the Energy Information Administration reported Thursday. Analysts at IHS Global Insight had expected a withdrawal of 116 billion cubic feet.
At 2,830 billion cubic feet, stocks were 31 billion cubic feet higher than last year at this time and 87 billion cubic feet above the five-year average, the EIA reported.
