Crude Oil Ends Below $60 A Barrel On Supply Glut Concerns

(RTTNews) - U.S. crude oil pared much of the losses but still ended lower for a second straight session Thursday on supply glut concerns, even as the dollar trended lower and official data from the Energy Information Administration yesterday showed a decline in U.S. crude stockpiles last week.

Traders opted for profit-taking after oil prices rose to its highest level in 2015, with correction in the dollar giving commodity prices a lift this week.

Expectations of a price war between OPEC and non-OPEC oil producers may have only just begun, but are putting a cap on prices. With prices scaling the $60-mark, shale producers will be looking to lift production once again.

A surprising draw-down in U.S. crude oil stockpiles last week failed to generate much buying interest.

Light Sweet Crude Oil futures for June delivery, the most actively traded contract, dropped $0.62 or 1.0 percent, to settle at $59.88 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for June delivery scaled a high of $60.84 a barrel intraday and a low of $59.36.

On Wednesday, crude oil slipped $0.25 or 0.4 percent, to settle at $60.50 a barrel on supply glut fears despite official data from the Energy Information Administration indicated a decline in U.S. crude stockpiles end last week.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 93.46 on Thursday, down from its previous close of 93.62 on Wednesday in late North American trade. The dollar scaled a high of 93.76 intraday and a low of 93.13.

The euro trended higher against the dollar at $1.1396 on Thursday, as compared to its previous close of $1.1354 in North American trade late Wednesday. The euro scaled a high of $1.1446 intraday and a low of $1.1342.

On the economic front, the unexpected decline in weekly jobless claims has provided a boost to investor sentiment with first-time claims for U.S. unemployment benefits unexpectedly declining in the week ended May 9, a report from the Labor Department showed Thursday. Initial jobless claims edged down to 264,000, a decrease of 1,000 from the previous week's unrevised level of 265,000. Economists expected initial jobless claims to climb to 275,000.

A Labor Department report on Thursday showed an unexpected decrease in U.S. producer prices in April, reflecting a sharp pullback in energy prices. The producer price index for final demand fell 0.4 percent in April after edging up 0.2 percent in March. The index was expected to show another 0.2 percent increase.