Crude falls to $72

Oil fell to near 1 percent to on Thursday as a rise in US jobless claims stirred concerns about a rebound in the economy that could boost fuel demand. The number of US workers filing new applications for jobless insurance unexpectedly rose last week, but a gauge of future economic activity increased for the eighth month in a row, pointing to a slow economic recovery where employment looms as the dominant concern.
US crude for January delivery traded down 52 cents to $72.14 a barrel by 1:48 pm EST (1848 GMT). ICE Brent futures for February delivery shed $1.14 to $73.15 a barrel. US stock markets fell as investors sought safer havens, with the dollar hitting a 3-1/2-month high against the euro.
"With the dollar rebound, equity prices falling off and the jobless claims worse than expected, some of the negative factors in the market re-emerged," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut. Energy markets have looked to wider economic data this year for signs of a rebound in the economy that could give a lift to oil demand.
Oil's losses came despite a report from the US Energy Information Administration released on Wednesday, which showed a 3.7 million barrel draw in US crude inventories last week, against expectations of a 1.8 million barrels decline. Distillate stocks, which include diesel and heating oil, fell by 2.9 million barrels, far exceeding forecasts for a 600,000-barrel drop.
A further drawdown in distillate stockpiles could be on the cards, after a 10-day National Weather Service forecast this week called for unseasonably cold weather in most of the eastern United States, the world's biggest regional consumer of heating oil. "If demand starts coming through, we could have some little spikes. When you have to crank up refinery runs you should see more crude draws and the distillate overhang coming down," said Montefusco.
On the supply front, the Organisation of the Petroleum Exporting Countries (Opec), which pumps about one in three barrels of crude consumed around the world, is widely expected to keep output unchanged when it meets in Angola to discuss production policy on December 22. Suncor Energy Inc said a fire on Tuesday had affected operations at one of its oil sands upgraders, in Canada's Alberta Province.
The upgrader may be forced to cut output by up to 150,000 barrels a day, or half of its capacity, while it is repaired for two to four weeks, the company said. Oil traders said the outage was having little effect on oil futures prices since North American crude stocks remain well above historical average levels. Oil prices are now more than double the low of $32.40 a barrel touched in December 2008.