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Oil Retreats as US Jobless Claims Rise & Fed Ignites Fear

January 4, 2013 at 2:51 by Vladimir Vyun

Crude oil declined today as the minutes of the Federal Reserve’s policy meeting indicated that the monetary easing program may end as soon as this year. Traders were worried how the US economy will perform without stimulus. Such worries had a negative impact on fuel prices.

Rising jobless claims were not helping the matter either. Claims for unemployment benefits rose from 362,000 to 372,000 last week. The ADP report mitigated to some degree concerns caused by the rising claims as it showed an increase of employment by 215,000 jobs in December, much more than was expected by market participants. Still, investors are worried what today’s nonfarm payrolls will bring for markets and such worries deterred them from buying commodities (which are considered to be risky assets).

February futures for WTI crude declined $0.71 (0.76 percent) to $92.23 per barrel as of 2:46 GMT on NYMEX today. Brent grade of oil fell $0.76 (0.68 percent) to $111.38 per barrel on ICE.

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