NEW YORKâOil prices were lower again, weighed down by Wednesday's inventory report and a weak economic outlook in the euro zone.
Crude prices for front-month delivery in January were down $1.17 a barrel, or 1.3%, to $86.71 a barrel on the New York Mercantile Exchange.
Market participants said investors were still reacting to Wednesday's U.S. oil-inventory report, which said gasoline inventories rose by 7.9 million barrels last week, an increase of historic proportions. Distillate stocks were also somewhat higher.
"There's a sense of building supply and weak demand as we get into next year that's weighing on demand," said John Kilduff, a trader with Again Capital.
Also weighing on crude prices: the latest dreary economic forecast out of the euro zone.
European Central Bank President Mario Draghi Thursday said the ECB had cut its forecast for growth in the euro zone this year and next, and said a recovery would only start "later in 2013."
In opening remarks at the start of his news conference after the ECB governing council's monthly policy-setting meeting, Mr. Draghi said the council's central estimate for the economy next year was a contraction of 0.3%, a sharp revision downward from growth of 0.5% only three months ago. For 2014, the ECB expects growth of between 0.2% and 2.2%.
Market participants are also gearing up for Friday's release of the monthly U.S. nonfarm payroll data. Economists expect Hurricane Sandy was a drag on net job growth this month. The median forecast of economists surveyed by Dow Jones Newswires expects only 80,000 new jobs were added in November, less than half the healthy 171,000 created in October.
Finally, the market is beginning to turn its eye to the Organization of the Petroleum Exporting Countries, which meets next week in Vienna. Given the lofty state of crude-oil inventories, some experts expect OPEC to consider trimming output.
"They will have to make a cut either now or during the first half of next year unless the global economy turns around and oil demand goes through a growth spurt," said Dominick A. Chirichella at the Energy Management Institute. "The outcome of this meeting will be widely watched by the industry."
