17 September 2015, News Wires – Oil steadied on Thursday as a lower dollar and strong US employment data balanced weak Japanese trade figures which sounded alarm bells over the prospects for global growth, Reuters reported.
The number of Americans filing new applications for unemployment benefit fell last week to the lowest level in eight weeks, suggesting the US labour market was strong despite a tightening in financial market conditions, it said.
The data came ahead of an announcement by the Federal Reserve due at 2pm EDT, which could signal the first US interest rate rise for a decade.
Economists saw about a one-in-four chance of a rate increase. The dollar eased ahead of the announcement, according to the news wire.
North Sea Brent crude was down $0.15 at $49.60 a barrel by 1:45pm GMT, after hitting an early high of $50.14. US light crude oil was up $0.20 at $47.35 a barrel, Reuters said
Both global benchmarks had rallied sharply over the last three days as the dollar weakened on expectations that the US central bank, the Federal Reserve, would maintain interest rates at their current, very low, levels.
Traders said the employment data suggested the US economy could be growing more quickly than expected.
“The big drop in US weekly jobless claims is very supportive for the demand outlook,” John Kilduff, partner at Again Capital LLC in New York, told Reuters.
Asian data has been painting a much gloomier picture.
Japan’s exports slowed for a second straight month in August in a sign China’s economic slowdown could be damaging the world’s third-biggest economy.
The Japanese figures follow worrying data from other Asian economies, including South Korea and Taiwan, increasing anxiety over the consequences of a sharp slowdown in China.
This week’s rally has made a further sharp sell-off in oil less likely, Robin Bieber, a technical analyst and director of London brokerage PVM Oil Associates, told the news wire.
“It’s out of dump-danger at the moment,” Bieber said.
US oil output has begun to ease after six years of sharp increases. EIA data shows US crude and condensate production peaked at 9.612 million barrels per day in April and had declined by 316,000 bpd by June.