NEW YORKâOil futures fell for the second straight session, as traders looked past positive U.S. employment data and focused instead on swelling oil inventories and weak demand.
Light, sweet crude for June delivery fell $1.08, or 1%, to $104.14 a barrel on the New York Mercantile Exchange. Brent crude on ICE Futures Europe fell 57 cents, or 0.5%, to $117.63 a barrel.
Futures briefly entered positive territory after the Labor Department said the number of workers filing new claims for unemployment benefits fell to its lowest level in a month last weekâa drop of 27,000 to a seasonally adjusted 365,000.
The decline was larger than economists expected and marked a rare bit of good news from U.S. employers, whose hiring has slowed in recent months. Still, Wednesday's disappointing report from payroll giant Automatic Data Processing Inc. continued to weigh on the oil market. Traders are awaiting additional cues from Friday's nonfarm payrolls report, the most closely watched employment measure.
"There is still a good amount of tentativeness ahead of tomorrow given yesterday's poor ADP report," wrote Matt Smith, an analyst at Summit Energy in Louisville Ky.
Oil-market participants keep a close eye on employment data for signs on oil and fuel demand. High unemployment in the U.S., the world's biggest oil consumer, has been a major factor behind the slump in demand for gasoline because it means fewer motorists traveling to work or taking vacations.
On Wednesday, ADP said only 119,000 private-sector jobs were created in April, far below the 175,000 jobs expected.
Separately, the Energy Information Administration said Wednesday that U.S. oil inventories last week rose to their highest level since September 1990. The EIA said inventories rose by a greater-than-expected 2.8 million barrels during the week, with stockpiles now at their 19th highest level on record.
The last time oil stocks were higher, Nymex crude was fetching $30 a barrel.
The weak U.S. economy is likely to keep oil demand weak for the near future, said Dominick Chirichella, an analyst at the Energy Management Institute.
"All signs continue to point to the U.S. economy moving into another slow patch," he said. "I expect oil consumption to remain in a contraction trend that has been in place since 2007."
Front-month June reformulated gasoline blendstock, or RBOB, recently rose 0.73 cent, or 0.2%, to $3.0830 a gallon. June heating oil fell 2.02 cents, or 0.7%, to $3.1223 a gallon.
