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Crude Oil Ends Sharply Lower On Demand Concerns

U.S. crude oil futures plummeted to close lower for a second straight day Thursday, mostly on demand concerns after the Saudi Arabian oil minister confirmed his country would be able to up oil production to check soaring prices. Oil prices were also impacted by a massive build-up in U.S. crude stockpiles as per the Energy Information Administration yesterday.

Earlier today, the Saudi Arabian oil minister, Ali al-Naimi, in an opinion column in the Financial Times indicated that his country would be able to up supplies to stem higher oil prices. Al-Naimi said the real reasons for higher prices were not supply concerns, but rather the geopolitical irritants.

Light Sweet Crude Oil futures for May delivery, dropped $2.63 or 2.5 percent to close at $102.78 a barrel on the New York Mercantile Exchange Thursday.

Crude prices scaled a high of $105.70 a barrel intraday and a low of $102.13.

Yesterday, oil closed sharply lower as an Energy Information Administration report showed U.S. crude stockpiles increased more than double of what analysts expected.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.269 on Thursday, up from 79.253 in North American trade late Wednesday. The dollar scaled a high of 79.35 intraday, with a low of 78.96.

The euro was trading lower against the dollar at $1.3277 on Thursday, as compared to $1.3326 late Wednesday. The euro had scaled a high of $1.3345 intraday with a low of $1.3252.

The euro was impacted following a nation-wide workers strike gained momentum in Spain to protest against the planned austerity measures ahead of the government's latest budget proposals.

In economic news, the U.S. Labor Department said jobless claims edged down to 359,000 from the previous week's revised figure of 364,000. Economists had expected jobless claims to edge up to 350,000 from the 348,000 originally reported for the previous week.

Simultaneously, a report from the Commerce Department showed that GDP increased at an annual rate of 3.0 percent in the fourth quarter, unchanged from the previous estimate and in line with economist estimates.

From the eurozone, Germany's unemployment rate declined to 6.7 percent in March from 6.8 percent in February, data from the Federal Labor Agency showed. Economists had forecast jobless rate to remain steady at 6.8 percent for a third consecutive month. The number of unemployed persons declined by 18,000 from a month earlier in March. Economists expected the number of unemployed to decrease by 10,000.

Meanwhile, euro zone economic confidence dropped marginally in March after improving in January and February, survey data from the European Commission revealed. The economic sentiment index fell to 94.4 from 94.5 a month ago. The reading was below the consensus forecast of 94.5.

by RTTNews Staff Writer

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