By David Turner
LONDON, Aug 19 (Reuters) - Oil dipped towards $75 per barrel
on Thursday, paring earlier gains, after a surprise rise in U.S.
unemployment claims to a nine-month high was balanced by an
upgrading of Germany's growth forecast by its central bank.
The U.S. jobless figures, published at 1230 GMT, heightened
concerns about the pace of recovery in the U.S., the world's
"The U.S. is still by far the largest oil consumer
worldwide," said Eugen Weinberg, commodities analyst at
Commerzbank in Frankfurt.
"So a dent in sentiment will keep prices under pressure for
some time, until we see the recovery of the jobs market in the
U.S., because the weak point in the U.S. economy is not
corporate earnings, it's jobs."
Initial claims for state jobless benefits increased 12,000
to a seasonally adjusted 500,000 in the week ended August 14,
the highest since mid-November, the U.S. Labor Department said.
U.S. September crude was down 6 cents to $75.36 a barrel at
1318 GMT. ICE front-month Brent fell 23 cents to $76.24.
However, oil found some support from a rally in equity
markets in Asia and Europe. European shares rose after Germany's
central bank upgraded its forecast for this year's economic
"We have recently seen a strong correlation between equities
and oil prices, and I don't think this connection will break
down in the coming days", said Andy Sommer of energy trading
firm EGL in Switzerland.
Commenting on oil prices' short-term outlook, Sommer said:
"I think we are still in a sideways trend. As long as we don't
see inventories start to come down, we will stay within a range
of $80 or $85 at the upper end, and $75 at the lower end."
Analysts downplayed the effect on oil prices of deepening
tensions between Iran and the United States. Ayatollah Ali
Khamenei, the country's supreme leader, said on Wednesday that
Iran would not talk with the U.S. in the current climate.
"Until we see anything of added importance (concerning
Iran), markets are dominated still by economic recovery and
those sorts of problems", said James Hughes, market strategist
at CMC Markets in London.
"With it being such a prolonged issue, the market does
become a bit desensitised to the whole situation," he added.
The U.S. benchmark recovered after touching a six-week low
at $73.83 on Wednesday, when the Department of Energy said total
U.S. petroleum stockpiles last week had soared to the highest in
at least 20 years on a weekly basis..
U.S. commercial crude and product inventories rose last week
to the highest level since the government began tracking weekly
data in 1990, the statistics published on Wednesday showed.
Analysts took this as a sign that fuel supply is outpacing
demand because U.S. economic recovery is slow.
(Additional reporting by Alejandro Barbajosa; Editing by
Anthony Barker and Alison Birrane)