Crude Oil Ends Lower On Demand Growth Concerns

(RTTNews) - U.S. crude oil shed early gains to end lower on Thursday, after some soft economic data from the U.S. reignited concerns over demand growth with fears of a supply glut as investors digested news of increased supplies from Libya.

Investors also kept a close watch on the U.S. and Allies airstrikes on IS positions in Iraq and Syria, which has considerably eased the militants' deadly expansion.

In economic news, initial claims for unemployment benefits in the U.S. showed a modest rebound last week, after having reported first-time claims in the earlier week at a near fourteen-year low. Reflecting volatility in commercial aircraft orders, a U.S. Commerce Department report on Thursday showed a sharp pullback in orders for manufactured durable goods in August following the substantial increase seen in July.

Signs of increased supplies from Libya against a background of some significant drop in crude stockpiles in the U.S. also impacted prices. Investors also continued to monitor the situation in Syria where the U.S. and its Arab allies have reportedly bombarded oil installations controlled by Islamic militants on Wednesday.

Light Sweet Crude Oil futures for November delivery, the most actively traded contract, dropped $0.27 or 0.3 percent to close at $92.53 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for November delivery scaled a high of $93.54 a barrel intraday and a low of $92.05.

On Wednesday, crude oil soared after a report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have dropped 4.3 million barrels in the week ended September 19, against an expectation of 0.4 million barrels decline.

Geopolitical worries remained with the U.S. President Barack Obama calling for more nations to join the fight against Islamic militants in Syria and Iraq.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 85.20 on Thursday, up from its previous close of 84.06 late Wednesday in North American trade. The dollar scaled a high of 85.49 intraday and a low of 85.05.

The euro trended lower against the dollar at $1.2750 on Thursday, as compared to its previous close of $1.2780 late Wednesday in North American trade. The euro scaled a high of $1.2783 intraday and a low of $1.2698.

In economic news from the U.S., a Labor Department report showed jobless claims to have climbed less than expected to 293,000 in the week ended September 20, an increase of 12,000 from the previous week's revised level of 281,000. Economists had expected jobless claims to rise to 300,000.

A Commerce Department report showed orders for durable goods in the U.S. declined by a record 18.2 percent in August, after posting a sharp 22.5 percent increase in the preceding month. Economists expected orders to drop by about 18.0 percent. Excluding transportation sector, orders were up 0.7 percent in August.

Adjusted for seasonal influences, the Markit Flash U.S. Services PMI Business Activity Index dropped to 58.5 in September from 59.5 in August. Economists expected a reading of 59.2 for September.

European Central Bank President Mario Draghi said Thursday that Euro area economy is likely to expand in the second half of this year even though the recovery seems to have lost momentum recently.

The Asian Development Bank maintained its growth outlook for Developing Asia as key nations move ahead with structural reforms. China is forecast to grow 7.5 percent in 2014 and 7.4 percent in 2015, unchanged from the estimates published in April. The ADB maintained the 5.5 percent growth forecast for India in 2014 but raised its 2015 outlook by 0.3 percentage points to 6.3 percent.