Crude Oil Ends Lower As Dollar Strengthens

(RTTNews) - U.S. crude oil snapped a two-day gain to end lower on Thursday, as the dollar strengthened against a basket of major currencies after some upbeat U.S. retail sales data for May, and on the International Energy Agency's demand growth and supply assessment for oil.

The International Energy Agency in its monthly oil market report said demand for oil is expected grow more than previously forecast. The IEA lifted its growth estimate, indicating demand to rise by 1.4 million barrels a day, for an average of 94 million barrels for the year. This is higher than its previous projection as economic growth, extreme cold and lower prices have helped lift consumption in the first half of 2015.

The IEA report showed supplies from the Organization of the Petroleum Exporting Countries increased by 50,000 barrels in May to 31.33 million barrels per day from a month earlier. This was the highest level of supply since August 2012, due mostly to the higher output from Saudi Arabia and Iraq.

However, the agency also indicated that supply growth will remain strong with increasing competition for market share.

In economic news, U.S. retail sales jumped 1.2 percent in May, a welcome sign for those betting the U.S. economy would come back from a rough winter. However, first-time claims for U.S. unemployment benefits increased more than expected last week after reporting a modest decrease in in the previous week, a Labor Department report said Thursday.

Light Sweet Crude Oil futures for July delivery, the most actively traded contract, dropped $0.66 or 1.1 percent, to settle at $60.77 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for July delivery scaled a high of $61.53 a barrel intraday and a low of $60.21.

On Wednesday, crude oil jumped $1.29 or 2.1 percent, to settle at $61.43 a barrel, after a weekly report from the U.S. Energy Information Administration said crude oil inventories dropped 6.8 million barrels in the week ended June 5, while analysts expected a decline of 1.6 million barrels.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 95.14 on Thursday, up from its previous close of 94.61 on Wednesday in late North American trade. The dollar scaled a high of 95.60 intraday and a low of 94.71.

The euro trended lower against the dollar at $1.1261 on Thursday, as compared to its previous close of $1.1324 in North American trade late Wednesday. The euro scaled a high of $1.1329 intraday and a low of $1.1185.

On the economic front, retail sales in the U.S. showed a notable increase in the month of May, according to a report released by the Commerce Department on Thursday. The Commerce Department said retail sales jumped by 1.2 percent in May, matching economists' consensus estimate.

After reporting a modest decrease in first-time claims for U.S. unemployment benefits in the previous week, the Labor Department released a report on Thursday showing a slight uptick in clams in the week ended June 6. Initial jobless claims inched up to 279,000, an increase of 2,000 from the previous week's revised level of 277,000. Economists had expected jobless claims to edge down to 275,000 from the 276,000 originally reported for the previous week.

China's industrial production and retail sales growth improved in May as recent measures taken to boost bank lending penetrate into economic activity. Industrial production grew 6.1 percent year-over-year in May, following a 5.9 percent gain in April, figures from the National Bureau of Statistics showed Thursday. Economists had expected a 6.0 percent increase for the month.

In another report, the NBS said retail sales in China surged 10.1 percent in May. This is in line with expectations, but slightly faster than previous month's 10.0 percent expansion. In March, sales had risen 10.2 percent.

French consumer prices increased for the second straight month in May, in line with expectations, figures from the statistical office Insee showed Thursday. The consumer price index rose 0.3 percent year-over-year in May, faster than previous month's 0.1 percent increase. The figure was also matched with consensus estimate.

France's non-farm payroll employment remained virtually stable in the first quarter after rising in the previous quarter, preliminary data released by statistical office INSEE showed Thursday. Payroll employment in the principally market sectors, which include the manufacturing, construction and services sectors, remained stable quarter-on-quarter, following the 0.1 percent rise in the previous quarter.

With prices for fuel imports showing a substantial increase, the Labor Department released a report on Thursday showing that U.S. import prices rose by more than expected in May.

The report said import prices surged up by 1.3 percent in May following a revised 0.2 percent decrease in April. Economists had expected import prices to climb by about 0.8 percent.

The Labor Department also said export prices rose by 0.6 percent in May after falling by 0.7 percent in April. Export prices had been expected to inch up by 0.2 percent.

Partly reflecting a notable increase in retail inventories, the Commerce Department released a report on Thursday showing that U.S. business inventories rose by more than expected in April. The Commerce Department said business inventories increased by 0.4 percent in April following a 0.1 percent uptick in March. Economists had expected inventories to edge up by 0.2 percent.