Crude oil hits fresh 4-month low after U.S. jobless claims, PMI data

Investing.com - Crude oil futures fell a fresh four-month on Thursday, as concerns over the U.S. economic outlook and the impact on future oil demand prospects dampened the appeal of the commodity.

On the New York Mercantile Exchange, light sweet crude futures for delivery in December traded at USD96.23 a barrel during U.S. morning trade, down 0.65%.

New York-traded oil futures fell to a session low of USD95.97 a barrel earlier, the weakest level since June 27.

The December contract ended 1.46% lower at USD96.86 a barrel on Wednesday.

Oil futures were likely to find support at USD95.35 a barrel, the low from June 27 and resistance at USD98.27 a barrel, the high from October 23.

Oil prices fell to the lowest levels of the session after preliminary data showed that U.S. manufacturing activity fell to a 12-month low of 51.1 in October from a reading of 52.8 in September.

A separate report from the U.S. Department of Labor showed that the number of individuals filing for initial jobless benefits declined by 12,000 last week to a seasonally adjusted 350,000.

Analysts had expected U.S. jobless claims to fall by 22,000 to 340,000 last week.

Jobless claims for the preceding week were revised up to a gain of 362,000 from a previously reported increase of 358,000.

U.S. crude prices have been on a downward trend in recent weeks amid concerns the recent U.S. government shutdown created a drag on economic growth and eroded demand in the world’s largest oil consumer.

Official data released Wednesday showed that U.S. crude oil inventories rose by 5.2 million barrels last week to hit 379.8 million barrels, the highest level since June 28.

The U.S. is the world’s largest oil consuming nation and manufacturing numbers are used as indicators for fuel demand growth.

Meanwhile, stronger-than-expected Chinese manufacturing data failed to offset concerns over tightening liquidity conditions in the country’s banking sector.

Data released earlier showed that China’s HSBC manufacturing index for October rose to a seven-month high of 50.9, up from a final reading of 50.2 in September. Economists had expected the index to tick up to 50.5.

However, sentiment remained weak amid concerns over a cash crunch in the Chinese financial system after interbank lending rates moved higher for a second day.

China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for December delivery inched down 0.4% to trade at USD107.35 a barrel, with the spread between the Brent and crude contracts standing at USD11.12 a barrel, the widest since mid-April.