Crude oil plunges to hit 8-day low after ECB, U.S. jobless claims

          Crude oil futures extended losses to fall to an eight-day low during U.S. morning hours on Thursday, as appetite for growth-linked assets weakened amid concerns over the fragile economic recoveries in the U.S. and the euro zone.
 
On the New York Mercantile Exchange, light sweet crude futures for delivery in May traded at USD93.21 a barrel during U.S. morning trade, down 1.3% on the day.

New York-traded oil prices fell by as much as 1.5% earlier in the day to hit a session low of USD93.09 a barrel, the weakest level since March 22.

Nymex oil prices fell to the lowest levels of the session after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits rose by 28,000 to a four-month high of 385,000 last week, confounding expectations for a decrease of 7,000 to 350,000.

Market players now looked ahead to Friday’s highly-anticipated U.S. monthly nonfarm payrolls report to further asses the strength of the country’s economy.

Oil traders have long been taking cues from the monthly jobs report, the most-closely followed indicator of U.S. employment, because it offers insight into the economic health of the world's biggest crude oil consumer.

An improving economy is generally correlated with increased demand for oil and fuel products like gasoline.

Prices came under additional pressure after European Central Bank President Mario Draghi voiced concern over the euro zone’s economic outlook, saying that the recovery in the second half of the year is subject to “downside risks”.

Draghi’s comments came after the ECB left rates on hold at a record low 0.75% earlier, in a widely anticipated decision.

Oil prices were further weighed by a stronger U.S. dollar, as dollar-priced commodities become more expensive to investors holding other currencies when the greenback gains.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.85% to trade at 83.58, the strongest level since August.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for May delivery fell 0.55% to trade at USD106.53 a barrel, with the spread between the Brent and crude contracts standing at USD13.32 a barrel.

The spread between the two contracts continued to trade near a nine-month low, due to an improving production outlook in the North Sea and amid growing concerns over the euro zone’s economic outlook.

At the same time, U.S. oil stockpiles at Cushing, Oklahoma, the delivery point for Nymex oil futures, are declining as new pipelines relieve a supply glut there.

Crude inventories at Cushing fell by 287,000 barrels to 49.2 million last week, according to the EIA.
Courtesy : Investing.com