The U.S. Labor Department is expected to report 210,000 nonfarm
payroll jobs were added in April, according to a Reuters survey of
economists, which would be supportive for crude oil demand even as
domestic inventories rose again last week.
However, data released Thursday showed an unexpected rise in
unemployment claims last week, causing trepidation ahead of the
report, which is scheduled to be released Friday at 8:30 a.m. (1230
In China, the world's second-largest oil consumer, April factory
activity rose marginally but export orders fell, which reinforced
worries that economic growth will continue to slow.
Adding further pressure on Brent, Libya's Zueitina oil port was said
to have begun loading its first tanker of crude Thursday after being
closed for nearly 10 months.
Other economic data out Thursday showed U.S. consumer spending rose
in March and factory activity accelerated, capping losses in U.S.
Brent crude settled down 31 cents at $107.76 a barrel, after falling
by as much as $1.22 to an intra-session low of $106.85, the weakest
since April 8.
U.S. crude settled 32 cents lower at $99.42 a barrel, after falling
by $1 to $98.74 earlier in the session, where it found support at
the 100-day moving average.
The U.S. Energy Information Administration on Wednesday said U.S.
crude stocks rose last week to just under 400 million barrels, the
highest since 1982. That increase pressured U.S. crude, widening its
discount to Brent <CL-LCO1=R> to $8.44 on Thursday.
"The supply in the U.S. is very strong," said Carl Larry, CEO of
consultancy Oil Outlooks. "The only thing that can turn the market
around is more job creation, which would be a strong signal that
demand would rise. Jobs equate oil demand."
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Seasonal sell-offs in U.S. gasoline and news that the Port Arthur
Refinery was increasing output sent front-month RBOB prices 2.6
cents lower to $2.9384 per gallon, which also put pressure on U.S.
"U.S. crude oil is a bit over-sold and in the last couple days of
April many funds sold off long positions in RBOB" which removed some
of the support for U.S. crude prices, said Richard Ilczyszyn, chief
market strategist and founder of iitrader.com LLC in Chicago.
Violence in eastern Ukraine and traders' anxiety that this could
lead to disruptions to Russian oil supply set the floor and
prevented bigger moves to the downside, analysts said.
"With all the geopolitical risk and demand for refined products,
we'll see (U.S. crude) stay in this range between this $98-$97
area," said Ilczyszyn
(Additional reporting by Alex Lawler in
London and Florence Tan in Singapore; editing by Alden Bentley and
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