Thursday, June 17, 2010

Crude Oil Falls From Six Week High After Increase in U.S. Jobless Claims

Crude oil fell from a six week high after U.S. jobless claims unexpectedly rose and manufacturing in the Philadelphia region expanded at a slower rate than forecast, casting doubt on the strength of the economic recovery. Oil dropped for the first time in four days as the Labor Department said the number of Americans seeking jobless benefits last week climbed to a one month high. The Federal Reserve Bank of Philadelphia’s general economic index decreased in June to the lowest level since August.

“The Philadelphia Fed and the jobless claims are sparking concerns about economic growth and the resulting energy demand or lack thereof,” said Kyle Cooper, a managing director at energy consultant IAF Advisors in Houston. Crude oil for July delivery lost $1.37, or 1.8 percent, to $76.30 a barrel at 12:40 p.m. on the New York Mercantile Exchange. Futures have risen 7.4 percent in the past year.

Initial jobless applications increased by 12,000 to 472,000 in the week ended June 12. Economists surveyed by Bloomberg News projected 450,000 claims, according to the median forecast. The number of people receiving unemployment insurance rose, while those getting extended benefits dropped.

The Philadelphia Fed’s index dropped to 8 this month from 21.4 in May. Readings above zero indicate growth in the regional gauge, which covers eastern Pennsylvania, southern New Jersey and Delaware. Economists forecast a decrease to 20, according to the median projection in a Bloomberg News survey.....Read the entire article.

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