Crude Oil Ends Below $94 On Demand Growth Concerns

(RTTNews) - U.S. crude oil ended lower Thursday, on demand growth concerns after an OPEC report showed output in December to have declined, with Iran expected to resume export of its crude after a deal to lift sanctions with six world powers. Some soft inflation and initial unemployment benefit claims data out of the U.S. also dampened investor sentiments, even as the dollar trended lower against some major currencies.

In some soft economic news from the U.S., first-time claims for unemployment benefits showed a modest decline last week, dropping to a six-week low. As well, U.S. consumer prices rose in line with economists' estimates in December, with energy prices showing a notable rebound as gasoline prices jumped.

Meanwhile, the Organization of the Petroleum Exporting Countries projected demand for its crude in 2014 to likely decline, as it sees higher production from non-OPEC countries such as the U.S., Canada, and Brazil. OPEC said demand for its oil would likely dip by 300,000 barrels a day from a year ago. OPEC supply is indicated to have declined by 20,000 barrels a day to 29.44 million in December, which is less than the 29.6 million forecast for 2014. Non-OPEC countries are expected to increase supplies by 1.27 million barrels a day to 55.38 million barrels in 2014.

Light Sweet Crude Oil futures for February delivery, the most actively traded contract, dropped $0.21 or 0.2 percent to close at $93.96 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for February delivery scaled a high of $94.64 a barrel intraday and a low of $93.60.

Oil prices soared to end sharply higher yesterday ended higher yesterday, after an official report from the Energy Information Administration showed crude stockpiles in the U.S. plunged much more than expected for a seventh straight week of decline.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.91 on Thursday, down from its previous close of 81.03 late Wednesday in North American trade. The dollar scaled a high of 81.12 intraday and a low of 80.77.

The euro traded higher against the dollar at $1.3615 on Thursday, as compared to its previous close of $1.3605 late Wednesday in North America. The euro scaled a high of $1.3649 intraday and a low of $1.3584.

In economic news, first-time claims for U.S. unemployment benefits declined in the week ended January 11, falling to their lowest level in over a month, a report from the Labor Department showed Thursday. Initial jobless claims edged down to 326,000, a decrease of 2,000 from the previous week's revised figure of 328,000. Economists expected jobless claims to dip to 328,000 from the 330,000 originally reported for the previous week. Initial jobless claims have thus fallen to its lowest level since hitting 305,000 in the week ended November 30.

U.S. consumer prices rose in line with economists' estimates in December, with energy prices showing a notable rebound, the Labor Department said in a report on Thursday. The consumer price index rose 0.3 percent in December after coming in unchanged in November. The price growth, which matched the expectations of economists, reflected the biggest monthly increase since June. The increase was partly due to a 2.1 percent rebound in energy prices after gasoline prices jumped 3.1 percent, which followed decreases in November and October of 1.0 percent and 1.7 percent, respectively.

Manufacturing growth in the Philadelphia-area continued in January, with the index of regional manufacturing activity rising by more than expected, a report from the Federal Reserve Bank of Philadelphia showed Thursday. The Philly Fed diffusion index of current activity rose to 9.4 in January from a revised 6.4 in December, with a positive reading indicating an increase in regional manufacturing activity. Economists expected the index to climb to 8.7. A break-up shows the shipments index edged up to 12.1 in January from 11.9 in December, while the new orders index fell to 5.1 from 12.9.

A report from the National Association of Home Builders on Thursday showed homebuilder confidence in January pulled back modestly, after reporting a significant improvement in in the previous month. The NAHB/Wells Fargo Housing Market Index edged down to 56 in January from a downwardly revised 57 in December. Economists expected the index to come in unchanged compared to the 58 originally reported for the previous month. Despite the unexpected pullback, the housing market index remains above the reading of 54 recorded in November.

The Chicago business barometer came in higher than previously estimated in December as a result of the annual seasonal adjustment recalculation, according to a report from MNI Indicators on Thursday. The Chicago business barometer for December came in at 60.8 compared to the previously reported 59.1. A reading above 50 indicates growth in Chicago-area business activity. The barometer was revised lower in the first quarter but was upwardly revised in both the third and fourth quarters, pointing to an even stronger second half than initially estimated.