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Oil falls below $72 as energy supplies grow

Oil falls below $72 as energy supplies grow

Oil prices fell below $72 a barrel Thursday on more evidence of consumer anxiety and also growing supplies of unused crude and natural gas.
Benchmark crude for September delivery lost 79 cents to $71.18 a barrel on the New York Mercantile Exchange. In London, Brent prices fell 73 cents to $74.78 a barrel on the ICE Futures exchange.
Still, crude prices have been rising since mid-July and dragging retail gas prices along.
Andrew Lebow, senior vice president and broker at MF Global in New York, said even though crude stockpiles are growing, government reports show demand for gasoline has ticked higher in recent weeks. That counteracted the effects of a stronger dollar, at least on Thursday.
The Labor Department also said Thursday that initial unemployment claims fell more than expected to 550,000 for the week ending Aug. 1. While the total number of people seeking jobless benefits increased, analysts saw the report as fresh evidence that the economy is improving, which may have supported energy prices somewhat.
Crude has traded near $71 a barrel for the last couple days after shooting up from below $62 last week as investors try to gauge whether a weak U.S. economy justifies a further rally.
There is still plenty of crude. Over the past two weeks more than 7 million barrels have gone into storage, rather than being refined into jet fuel, diesel or gasoline.
"Supplies of crude oil are well above seasonal norms ... yet our friends, the speculators, still like owning Nymex crude oil, a lot of Nymex crude oil," said analyst Stephen Schork. "Therefore, once again high prices are becoming the justification for high prices."
In other Nymex trading, gasoline for August delivery fell less than a penny to $2.0510 a gallon and heating oil dropped 2.94 cents to $1.9275. Natural gas for August delivery fell 27 cents to $3.772 per 1,000 cubic feet.
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Associated Press writers Pablo Gorondi in Budapest and Alex Kennedy in Singapore contributed to this report.


Updated : 2021-10-23 07:36 GMT+08:00