Forexpros – Crude oil futures turned modestly lower on Thursday, dipping briefly below the key USD100-a-barrel level after a report showed an unexpected increase in U.S. jobless claims, while concerns over a potential disruption to Iranian supplies continued to underpin prices.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in January traded at USD100.05 a barrel during early U.S. morning trade, shedding 0.3%.
It earlier fell by as much as 0.4% to trade at a daily low of USD99.89 a barrel.
The U.S. Department of Labor said earlier that the number of people who filed for unemployment assistance in the U.S. last week rose unexpectedly, climbing above 400,000 for the first time in three weeks.
Prices remained support as investors awaited the outcome of a meeting of European Union foreign ministers later in the day in Brussels, at which they were expected to discuss whether to press ahead with an Iranian oil import embargo.
The ministers were also expected to add nearly 200 Iranian companies and individuals to its sanctions list and will discuss the regional response to the attack on the British embassy in Tehran earlier in the week.
Iran is the world’s fourth largest oil producer and the second biggest exporter among OPEC members.
Meanwhile, concerns over the euro zone’s debt crisis eased slightly after Spain’s Treasury auctioned the full targeted amount of EUR3.75 billion of government bonds earlier in the day, while France auctioned as much as EUR4.5 billion of debt, but both countries saw borrowing costs increase.
The auctions were seen as a major test of investor confidence, coming one day after six major central banks, including the Federal Reserve and the European Central Bank cut the cost of emergency dollar funding for European banks in a coordinated action.
But investors remained jittery after European Central Bank President Mario Draghi said earlier that downside risks to the economic outlook have increased.
Worries over a slowdown in demand from China also weighed after official data showed that Chinese manufacturing activity contracted in November for the first time in nearly three years as export orders fell sharply.
China is the world’s second largest consumer after the U.S. and has been the engine of strengthening demand. Manufacturing numbers are used as indicators for fuel demand growth.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for January delivery dropped 0.95% to trade at USD109.47 a barrel, with the spread between the Brent and crude contracts standing at USD9.42 a barrel.
Wall Street investment bank Goldman Sachs said in a report Wednesday that it expected Brent prices to rise to USD127.50 a barrel at the end of next year and to USD135 by the end of 2013.
The bank said that, “oil prices will continue to rise in order to slow demand growth, even in a relatively poor economic growth environment”.
Forexpros
