Posted: 26 February 2010 0542 hrs
NEW YORK - Oil prices fell sharply Thursday amid concerns over economic recovery arising from weak US economic data and Greece's crisis-hit finances, as well as the stronger dollar.
New York's main futures contract, light sweet crude for April delivery, fell 1.83 dollars to 78.17 dollars a barrel.
London's Brent North Sea crude for April delivery shed 1.80 dollars to 76.29 dollars a barrel.
Investors were concerned over weak US economic data this week -- rising weekly claims for jobless insurance benefits, plunging consumer confidence and the sluggish housing market at the center of financial turmoil, said independent oil analyst Ellis Eckland.
"The implication is that demand won't be as good as expected," he said.
New claims for US jobless benefits jumped to a three-month high, the government said Thursday in a report underscoring ongoing struggles for the labor market and the economic recovery.
The increase in claims by 22,000 to 496,000 for the week ending February 20 was the second consecutive gain, with claims having reached a level not seen since November, analysts said.
On Wednesday, a closely watched survey showed US consumer confidence tumbled in February as Americans turned sharply more pessimistic about the labor market and economic recovery,
The Conference Board, a business research firm, said its consumer confidence index fell to 46.0 in February -- its lowest reading since April 2009 -- from an upwardly revised 56.5 in January.
Sales of new homes in the United States plunged by 11.2 percent in January from December to a historic low, the government reported Wednesday in a fresh sign of weakness in the troubled housing market
Oil prices also came under pressure as the dollar gained at the expense of the euro amid rising fears of sovereign default as Greece grappled with a raging debt crisis, said Mike Fitzpatrick, vice-president of MF Global.
A stronger greenback weighs on dollar-denominated crude because the commodity becomes more expensive for buyers holding weaker currencies.
The dollar is still "a very, very important indicator" for the oil market, said Tetsu Emori, commodities fund manager at Astmax Investments.
Fitzpatrick said that fresh US housing data coupled with the US Fed chief Ben Bernanke's intention to keep rates low for some time "should speak volumes about policymakers opinion of the alleged recovery.
"Unless and until consumers go back to work, and start feeding the demand upon which oil prices are necessarily dependant, prices will remain in check," Fitzpatrick said.
- AFP /ls
Source: http://www.channelnewsasia.com/stories/afp_world_business/view/1040042/1/.html
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