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Massive rise in jobless claims gives world's largest economy a setback

LONDON – US crude oil prices fell below $74 a barrel after this week's feeble US economic data raised doubts about the top oil-consuming nation's ability to use up its highest petroleum inventories in two decades.

US crude prices for September fell 73 cents to $73.70 a barrel by 1220 GMT on contract expiry day, continuing a two-session drop.

The more actively traded October contract dipped 76 cents to $74.01 per barrel while the Brent contract for the same period was down 68 cents at $74.62.

Oil prices slid to a six-week low of $73.83 a barrel on Wednesday after data from the Energy Information Administration showed US oil stocks rose to 1.130 billion barrels in the previous week – the highest level in at least 20 years.

Since then, the already frail US economic recovery received fresh setbacks after jobless claims rose to a nine-month high last week and mid-Atlantic manufacturing shrank in August, alerting the market to the dangers of a stubborn supply overhang.

"Even measured by the subpar nature of the macro numbers we have been seeing in recent weeks, Thursday's batch of figures were particularly disappointing....Excessive gains are getting rolled back given the ‘slow-growth' track we seem to be on," said Edward Meir at MF Global in a research note.