Oil prices swing as energy demand remains weak

PanARMENIAN.Net - Oil prices swung between slight gains and losses Friday, Nov 16, barely budging despite an escalation in fighting between Israel and militants in Gaza, as demand for energy remains weak and supplies are ample, The Associated Press reported.

Benchmark oil for December delivery was down 1 cent to $85.44 per barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract dropped by 87 cents to finish at $85.45 per barrel in New York on Thursday.

Lingering fears that oil supplies could be disrupted if the Israel-Hamas conflict grows were kept in check by signs that U.S. economy was struggling to maintain its momentum.

On Thursday, the government reported a rise in U.S. jobless claims and poor manufacturing data for the Philadelphia region.

The Federal Reserve Bank of Philadelphia said its manufacturing index was at minus 10.7, a five-month low. That's down from a reading of 5.7 in October. Meanwhile, Superstorm Sandy drove the number of people seeking unemployment benefits up to a seasonally adjusted 439,000 last week, the highest level in 18 months.

The U.S. Energy Information Administration said Thursday that crude oil supplies grew by 1.1 million barrels last week to 375.9 million barrels. That's 11.6 percent above year-ago levels.

"For many months, we've seen variations on the same theme: weak demand versus a year ago and some of the weaker demand numbers over the past decade," said American Petroleum Institute chief economist John Felmy. "The simple fact is that unemployment remains high and economic growth has been extremely modest. Petroleum demand is reflecting that."

Brent crude, used to price many kinds of international oil, was up 17 cents to $108.18 per barrel on the ICE Futures exchange in London.