INV: Crude oil futures trim gains after jobless claims data
Investing.com - Crude oil futures trimmed gains on Thursday, after data showed that the number of people who filed for unemployment assistance in the U.S. rose more-than-expected last week.
Prices were higher earlier in the session after unexpectedly strong manufacturing data out of the euro zone and China eased concerns over the global economic outlook.
On the New York Mercantile Exchange, light sweet crude futures for delivery in October traded at USD104.00 a barrel during U.S. morning trade, up 0.15%.
Prices rose by as much as 0.8% earlier in the session to hit a daily high of USD104.70 a barrel.
The October contract settled down 1.2% at USD103.85 a barrel on Wednesday.
Oil futures were likely to find support at USD102.28 a barrel, the low from August 8 and resistance at USD106.90 a barrel, the high from August 20.
Oil prices came off the highest levels of the day after the U.S. Department of Labor said the number of individuals filing for initial jobless rose by 13,000 to a seasonally adjusted 336,000 last week.
Jobless claims for the preceding week were revised up to a gain of 323,000, from a previously reported 320,000.
Analysts had expected U.S. jobless claims to rise by 7,000 to 330,000 last week.
Market participants have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Federal Reserve to reduce its bond purchases.
The minutes of the central bank’s July meeting published Wednesday showed that Fed officials were "broadly comfortable" with plans to scale back the bank’s USD85 billion-a-month stimulus program.
However, policymakers remain divided over the timing of possible reduction, with almost all committee members agreeing that a change in the asset purchase program was not yet appropriate.
The minutes described recent U.S. economic data as “mixed”, indicating that plans to taper could be pushed back if the economy was to weaken.
The central bank is scheduled to meet September 17-18 to review the economy and assess policy.
The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.
Oil prices were higher during European trading hours after data out of China eased concerns over a slowdown in the world’s second largest economy.
The preliminary reading of China’s HSBC manufacturing purchasing managers’ index rose to a four-month high of 50.1 in August, up from 47.7 in July. Economists had forecast a reading of 48.3.
The measure climbed above the 50.0-mark for the first time since April, indicating expansion in manufacturing activity.
China is the world's second largest oil consumer after the U.S. and manufacturing numbers are used as indicators for fuel demand growth.
Meanwhile, data out of the euro zone fuelled optimism over the region’s economic outlook.
The flash euro zone manufacturing purchasing managers’ index rose to 51.3 in August from a final reading of 50.3 in July. Analysts had expected the index to inch up to 50.8.
Germany’s manufacturing PMI rose to a 25 month high of 52.0, while the services PMI rose to a six-month high of 52.4.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for October delivery dipped 0.15% to trade at USD109.64 a barrel, with the spread between the Brent and crude contracts standing at USD5.64 a barrel.
