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Oil prices drop on Fed tapering fears

English.news.cn   2014-01-03 04:43:23            

NEW YORK, Jan. 2 (Xinhua) -- Oil prices dropped Thursday as an improving U.S. economy signaled a further tapering of stimulus later this year.

On the economic data, the number of Americans who initially applied for jobless benefits in the week ending Dec. 28 dropped 2, 000 to 339,000 from the previous week's upwardly revised figure of 341,000, said the Labor Department on Thursday.

Economic activity in the manufacturing sector expanded in December for the seventh consecutive month, registering 57, the second highest reading for 2013, according to the Institute for Supply Management, a global supply management association.

Separately, business conditions in the U.S. manufacturing sector improved at its fastest rate in 11 months in December, standing at 55.0 from 54.7 a month ago, financial data firm Markit reported Thursday.

Traders believed that the outlook for further tapering is the primary reason for oil prices' dive.

The U.S. dollar rose against a basket of major currencies after the data showed U.S. jobless claims fell and manufacturing expanded.

The gain in the U.S. currency also triggered the drop in oil prices. A stronger dollar reduced oil's investment appeal to traders using other currencies.

Light, sweet crude for February delivery lost 2.98 dollars to settle at 95.44 U.S. dollars a barrel on the New York Mercantile Exchange,while Brent crude for February delivery decreased 3.02 dollars to close at 107.78 dollars a barrel.

Editor: Mu Xuequan
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