BLBG: Crude Falls for Second Day on Jobless Claims, Euro
West Texas Intermediate crude fell for a second day as more Americans than projected filed applications for unemployment benefits last week and the euro weakened against the dollar.
Prices dropped as much as 1.8 percent as jobless claims rose to 385,000, the highest level since Nov. 24, the Labor Department reported. The median forecast was 353,000 in a Bloomberg survey. The euro slumped to a four-month low against the dollar after European Central Bank President Mario Draghi said monetary policy in the currency bloc will remain accommodative for as long as needed.
“The economic numbers are not good, especially on the jobs front, and people are very skittish,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “You are seeing this massive strength in the dollar and oil is definitely correlated with currencies now. We are going to see continued weakness in oil.”
WTI oil for May delivery fell $1.54, or 1.6 percent, to $92.91 a barrel at 9:23 a.m. on the New York Mercantile Exchange. It closed at $94.45 yesterday, the lowest settlement since March 22. Trading was 82 percent above the 100-day average for the time of day.
Brent crude for May settlement declined 86 cents, or 0.8 percent, to $106.25 a barrel on the London-based ICE Futures Europe exchange. It ended yesterday at the lowest settlement since Dec. 7. Trading was 87 percent above the 100-day average.
The European benchmark grade’s premium to WTI widened to as much as $13.49 from $12.66 yesterday, the narrowest since June.
Jobless Claims
U.S. jobless claims rose by 28,000 in the week ended March 30, the Labor Department said today in Washington. The four-week average of claims increased to 354,250 from 343,000.
A report tomorrow from the Labor Department may show employers added 190,000 workers to payrolls in March after 236,000 the month before, according to the median forecast in a Bloomberg survey. The jobless rate is projected to hold at 7.7 percent.
The euro fell as much as 0.8 percent to $1.2746, the lowest level since Nov. 21. A weaker euro and stronger dollar reduce dollar-denominated oil’s appeal as an investment alternative.
The ECB will keep monetary policy loose and further easing is possible if economic conditions deteriorate, Draghi said at a press conference in Frankfurt today after the bank kept its benchmark interest rate at a record low of 0.75 percent.
“Our monetary-policy stance will remain accommodative for as long as needed,” he said.
To contact the reporter on this story: Moming Zhou in New York at mzhou29@bloomberg.net;
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net
