Crude Oil Ends Lower On Profit Taking

(RTTNews) - U.S. crude oil ended sharply lower Thursday, on profit taking and easing supply concerns with reports that Libyan output is expected to increase shortly, even as crude oil inventories in the U.S. dropped much more than expected last week. Investors also continued to assess the Federal Reserve's unexpected move against tapering its $85 billion monthly bond-buying program.

The Federal Reserve on Wednesday refrained from tapering its massive bond-buying program in place since September last. The Federal Open Market Committee maintained its support measures in the wake of a disappointing August jobs report that raised concerns about the pace of the U.S. economic recovery.

Light Sweet Crude Oil futures for October delivery, the most actively traded contract, shed $1.68 or 1.6 percent to close at $106.39 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for October delivery scaled a high of $108.99 a barrel intraday and a low of $106.09.

Yesterday, oil prices surged after the Federal Reserve decided to against any cut to its $85 billion monthly bond buying program, until more signs of a stable economy is seen.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.37 on Thursday, up from 80.27 late Wednesday in North American trade. The dollar scaled a high of 80.45 intraday and a low of 80.07.

The euro traded slightly higher against the dollar at $1.3528 on Thursday, as compared to its previous close of $1.3522 late Wednesday in North America. The euro scaled a high of $1.3570 intraday and a low of $1.3502.

In economic news, a National Association of Realtors report on Thursday showed existing home sales in the U.S. unexpectedly climbed to their highest level in over six years in August. NAR said existing home sales rose 1.7 percent to an annual rate of 5.48 million in August after jumping 6.5 percent to a rate of 5.39 million in July. Economists expected existing home sales to dip to 5.25 million. This is the highest annual rate since February of 2007, when it touched 5.79 million.

The U.S. Labor Department on Thursday said claims for unemployment benefits rebounded less than expected in the week ended September 14. Initial jobless claims rose to 309,000, an increase of 15,000 from the previous week's revised figure of 294,000. Economists expected claims at 341,000.

The previous week's revised figure still reflects a seven-year low for jobless claims, although the data continues to be impacted by technical issues in two states. The Labor Department indicated the data for the latest week was also impacted by computer system upgrades, as the two states were still processing a backlog of claims.

A Federal Reserve Bank of Philadelphia report on Thursday showed manufacturing activity in the mid-Atlantic region picked up in September, with the index of regional manufacturing activity jumping to its highest level in over two years. The Philly Fed's diffusion index of current activity surged to 22.3 in September from 9.3 in August, with a positive reading indicating an increase in manufacturing activity. Economists expected the index to edge up to a reading of 10.0. The increase indicates the Philly Fed Index reached its highest level since hitting 36.1 in March 2011.

Meanwhile, a Conference Board report showed its index of leading U.S. economic indicators rose slightly more than expected in August. The Conference Board's leading economic index rose by 0.7 percent in August following a revised 0.5 percent increase in July. Economists expected the index to increase by 0.6 percent, in line with the growth originally reported for the previous month.

From Europe, U.K. retail sales declined for the first time in four months in August, reflecting weak demand for food. Retail sales volume, including automotive fuel, dropped unexpectedly by 0.9 percent month-on-month in August due to a fall in food sales, a report from the Office for National Statistics showed. Retail sales dropped for the first time in four months and by the most since last October in August. Economists expected sales to rise by 0.4 percent after the 1.1 percent increase in July.