Oil prices drop despite strong US growth data
NEW YORK (AFP) — World oil prices fell back Thursday after two days of modest gains, as the market was not encouraged by a stronger-than-expected estimate of US economic growth in the third quarter.
US benchmark West Texas Intermediate for December delivery lost US$1.08 to $81.12 a barrel.
In London trading, Brent North Sea crude for delivery in December shed 88 cents to $86.24 a barrel.
Prices remained slightly above the multi-year lows struck in mid-October.
The market received no boost from the first official estimate of US economic growth in the July-September quarter, which came in at a peppy 3.5 per cent, compared with expectations of only 3.0 per cent.
But that helped the dollar, which when stronger can make crude more expensive for other currencies.
And some analysts said they did not expect that pace to be sustained through the current quarter.
“This growth will be moderated by a rising US dollar and poor economic growth outside of the US,” said Doug Handler, the chief US economist at IHS.
Daniel Ang, investment analyst at Phillip Futures in Singapore, said investors also had an eye on the latest US supply report Wednesday, which showed crude reserves rose 2.1 million barrels in the week ended October 24.
While the inventories rise was smaller than expected, it still highlights the oversupply situation in the United States, Ang said.