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Oil slips under $91; US inventory data in focus

US jobless claims at lowest in more than two years
LONDON: Oil prices slipped under $91 in thin trading volumes on Thursday ahead of the release of the latest weekly US oil inventory data, expected to show a drawdown in crude stocks for the fourth consecutive week. US crude for February delivery fell 57 cents to $90.55 a barrel by 1415 GMT. ICE Brent crude shed 41 cents to $93.73
Oil prices brushed off a positive reading of new US jobless claims, which fell to their lowest levels in two years, suggesting the labour market could be regaining strength. Prices have traded range-bound near $91 a barrel after touching 26-month highs of $91.88 a barrel at the start of the week, but weakened during the penultimate trading session of 2010.
“The market environment is still very solid but you will see a bit of taking off risk before year end,” Barclays analyst Amrita Sen said.
Investors awaited the latest US Energy Information Administration’s weekly data due at 1600 GMT, with analysts forecasting a 2.6 million barrel drawdown in crude inventories, potentially marking the fourth straight weekly fall.
According to the survey, middle distillate stocks are expected to have fallen 600,000 barrels as abnormally cold weather stimulated demand; while gasoline stocks are forecast up 1.4 million barrels.
But Wednesday’s report by industry group American Petroleum Institute (API) confounded analysts’ expectations with a 3.1 million-barrel rise in crude stocks.
The API data also showed a build of 4.1 million crude barrels in the MidWest, or PADD 2. “If the DOE was to confirm the API, then at 99.1 million barrels it would be the highest level ever for crude oil stocks in the Midwest (Padd2),” Petromatrix’s Olivier Jakob said, which could pressure prices.
Volumes were thin with 33,799 deals by 1416 GMT compared with a daily average of around 105,369 over the past three days. “It’s relatively quiet trading today with a very short range and low volatility, (the prices have done) just a few cents in both directions,” Commerzbank commodities analyst Daniel Briesemann said. “We must wait until beginning of next year to get a clearer picture of where prices will go.” -Reuters


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