U.S. crude oil ended sharply lower Thursday, on concerns over the eurozone sovereign debt crisis with investors disappointed at the European Central Bank meeting outcome that indicated no concrete proposals. There were no positive moves to back European Central Bank President Mario Draghi's assurances last week that the central bank would do "whatever it takes" to protect the euro.
At a press conference, Draghi explained the ECB's decision to hold steady on interest rates. The ECB president assured that policy makers "will consider undertaking further non-standard measures" if conditions deteriorate. Draghi said the European Central Bank may craft plans in the coming weeks to make outright purchases of bonds, but warned the ECB cannot act alone to bring down borrowing costs.
Meanwhile, borrowing costs on Spain's 10-year government bond jumped to 6.86%, while the yield on 10-year Italian bonds surged to 6.15% following the ECB meeting.
Light Sweet Crude Oil futures for September delivery shed $1.78 or 2 percent to close at $87.13 a barrel on the New York Mercantile Exchange Thursday.
Crude prices scaled a high of $89.63 a barrel intraday and a low of $86.92.
Yesterday, oil ended higher after an Energy Information Administration report revealed U.S. crude oil stocks to have plummeted last week due mainly on lower imports.
The euro traded lower against the dollar at $1.215 on Thursday, as compared to $1.223 late Wednesday in North America. The euro scaled a high of $1.2405 intraday and a low of $1.2134.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 83.418 on Thursday, up from from 83.07 in North American trade late Tuesday. The dollar scaled a high of 83.51 intraday and a low of 82.20.
In economic news from the U.S, the Labor Department said initial jobless claims crept up to 365,000 from the previous week's revised figure of 357,000. Economists expected jobless claims to climb to 370,000 from the 353,000 originally reported for the previous week.
Despite continued strength in the transportation sector, new U.S. factory orders showed an unexpected drop in June, reversing a smaller than previously reported increase in May. The Commerce Department said new orders for manufactured goods decreased by $2.1 billion or 0.5 percent in June. With the decrease, factory orders fell in three of the last four months. Economists expected orders to increase by about 0.7 percent.
In other economic news, eurozone industrial producer prices fell 0.5 percent month-on-month in June, the same decline as seen in the prior month, Eurostat reported. The rate was marginally bigger than the expected decrease of 0.4 percent.
The Bank of England today maintained the asset purchase program at GBP 375 billion and the key interest rate at a historic low of 0.50 percent, as widely expected.
by RTT Staff Writer
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