Crude Oil Ends Lower On Weak China Trade Data

(RTTNews) - U.S. crude oil snapped a two-day gain to end lower on Thursday, with some weak trade data from China and a notable rise in U.S. crude oil inventories dragging on prices. Nonetheless, expectations that the U.S. Federal Reserve will maintain low interest rates for some time, and worries about supply disruptions from Russia limited oil's downside.

China's exports and imports declined unexpectedly in March, adding to evidence that suggests that the economy is struggling to achieve its targeted growth. Despite the significant drop, the Chinese Premier Li Keqiang has ruled out major stimulus to fight short-term dips in growth.

Light Sweet Crude Oil futures for May delivery, the most actively traded contract, dropped $0.20 or 0.2 percent to close at $103.40 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for May delivery scaled a high of $103.81 a barrel intraday and a low of $103.10.

Data from the Energy Information Administration on Wednesday revealed U.S. crude oil inventories to have jumped by 4.0 million barrels in the week ended April 4, more than analysts expectations for an increase of 2.5 million barrels.

Yesterday, crude oil ended at a five-week high amid concerns over possible supply disruptions due to the ongoing conflict in Ukraine and on news reports from Libya suggesting the reopening of its ports may be further delayed.

Meanwhile, a monthly report from the Organization of the Petroleum Exporting Countries (OPEC), showed its oil production to have dropped by over some half-million barrels in March, to 29.6 million barrels. Nonetheless, the OPEC lifted its outlook for non-OPEC supplies this year, with its 2014 demand outlook for OPEC oil down 100,000 barrels a day at 29.6 million barrels a day.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.38 on Thursday, down from its previous close of 79.53 late Wednesday in North American trade. The dollar scaled a high of 79.57 intraday and a low of 79.33.

The euro traded higher against the dollar at $1.3891 on Thursday, as compared to its previous close of $1.3855 late Wednesday in North America. The euro scaled a high of $1.3900 intraday and a low of $1.3836.

In economic news from the U.S., the Labor Department said initial jobless claims dropped to 300,000 in the week ended April 5, a decrease of 32,000 from the previous week's revised figure of 332,000. Economists expected jobless claims to edge down to 320,000 from the 326,000 originally reported for the previous week. With the bigger than expected decrease, jobless claims fell to their lowest level since hitting 297,000 in the week ended May 12, 2007.

A separate report from the Labor Department showed that import prices in the U.S. rose by a more than expected 0.6 percent in March, after climbing 0.9 percent in February. Meanwhile, export prices rose 0.8 percent in March following a revised 0.7 percent increase in the previous month.

China's shipments dropped 6.6 percent year-over-year in March, confounding expectations for a 4.8 percent increase. However, the rate of decline slowed from the 18.1 percent slump in February, figures from the General Administration of Customs showed Thursday. Export figures for March were largely distorted by a strong base comparison last year. Suggesting weak domestic demand, China's imports dipped 11.3 percent, reversing the 10.1 percent growth seen in February and in contrast to the 3.9 percent rise forecast by economists.

The Chinese trade balance showed a surplus of $7.7 billion in March, larger than the $1.8 billion surplus expected by economists. In February, the balance revealed a huge $22.9 billion deficit.