Crude Oil Ends A Tad Lower As Rig Count Rises

(RTTNews) - U.S. crude oil pared gains to end lower for a second straight session on Thursday, after data from Baker Hughes showed an increase in weekly oil rig count, following the jump in U.S. crude stockpiles last week.

For the week, crude oil futures plummeted about 4.5 percent.

Earlier, crude oil was ticking higher with the dollar trending lower against some select band of currencies on some disappointing economic data from the U.S.

A closely watched Labor Department report on Thursday showed weaker than expected U.S. job growth in June, although the unemployment rate still dropped to a seven-year low. Meanwhile, a separate report from the Labor Department showed an unexpected increase in initial jobless claims in the week ended June 27.

A report from oilfield service company, Baker Hughes Inc. on Thursday showed the number of active oil drilling rigs rose by 12 units to 640 rigs as of July 2, the first weekly increase in 30 weeks.

The surprise increase in rig counts come after some unexpected jump in official crude oil stockpiles reported by the U.S. Energy Information Administration on Wednesday.

U.S. crude oil inventories rose 2.4 million barrels in the week ended June 26, even as analysts expected stocks to decline 1.3 million barrels. The total U.S. crude oil inventories were at 465.4 million barrels end last week. Stockpiles had been dwindling since April as shale producers scaled back production due to low prices.

Meanwhile, Greece appears set to go ahead with Sunday's vote on the terms of its bailout plan. Although the Greek debt crisis pose a threat to the 17-nation currency bloc, there is widespread optimism that Athens will eventually come to an agreement with creditors, after its Sunday referendum. But there are others who bet that the terms of the bailout package arranged a few years back will be rejected in the referendum.

Light Sweet Crude Oil futures for August delivery, the most actively traded contract, shed $2.51 or 4.2 percent, to settle at $56.96 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for August delivery scaled a high of $57.95 a barrel intraday and a low of $56.65.

On Wednesday, crude oil prices plunged $2.51 or 4.2 percent, to settle at $56.96 a barrel, after the weekly stockpile report from the U.S. Energy Information Administration showed an unexpected jump in crude oil stockpiles.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.16 on Thursday, down from its previous close of 96.25 on Wednesday in late North American trade. The dollar scaled a high of 96.42 intraday and a low of 95.87.

The euro trended higher against the dollar at $1.1082 on Thursday, as compared to its previous close of $1.1053 in North American trade late Wednesday. The euro scaled a high of $1.1121 intraday and a low of $1.1037.

On the economic front, the U.S. Labor Department said non-farm payroll employment increased by 223,000 jobs in June, but below the addition of 230,000 jobs anticipated by economists.

Nonetheless, the unemployment rate still dropped to 5.3 percent in June from 5.5 percent in May. Economists expected the unemployment rate to dip to 5.4 percent. The bigger than expected decrease pulled the unemployment rate down to its lowest level since hitting 5.0 percent in April of 2008.

While the data was largely overshadowed by the release of the monthly jobs report, the Labor Department also released a report on Thursday showing an unexpected increase in initial jobless claims in the week ended June 27. Initial jobless claims rose to 281,000, an increase of 10,000 from the previous week's unrevised level of 271,000. Economists expected jobless claims to edge down to 270,000.

Eurozone producer prices continued to decline in May largely due to notable weakness in energy costs, data from Eurostat showed Thursday. Producer prices fell 2 percent year-on-year in May following a 2.1 percent drop in April. The annual fall matched economists' expectations.

The British construction sector expanded at a faster than expected rate in June, the fastest in four months, on higher output and new orders, survey figures from Markit Economics and Chartered Institute of Procurement & Supply showed Thursday. The seasonally adjusted Markit/CIPS UK Construction Purchasing Managers' Index rose to 58.1 in June from 55.9 in the previous month. Economists expected the index to rise to 56.5.

U.K. house prices dropped in June taking the annual growth to the lowest in two years, data from the Nationwide Building Society revealed Thursday. The annual increase in house prices moderated to a two-year low of 3.3 percent in June from 4.6 percent in May. Economists had forecast a 4.5 percent rise for June.