Crude oil fell on Thursday as traders worried that an economic slowdown could weaken oil and gasoline demand in the U.S.
A report released today showed the number of people filing first-time claims for unemployment benefits increased unexpectedly last week. The results were higher than what economist expected, rising 69,000 to 375,000.
Crude oil slumped 93 cents or 1.01 percent to $91.40 a barrel on the New York Mercantile Exchange at 5:08 p.m. Brent crude fell 34 cents, or 0.37 percent to $92.56 a barrel on London's ICE Futures Exchange.
Signals of an economic recession which originated with the housing credit crisis last year have continued to worry worldwide economies. In less than two weeks the U.S. Federal reserve has cut interest rates to 3 percent from a 4.25 percent to stave off a slowdown.
Meanwhile, U.S. senators are discussing a stimulus package initially proposed by President George Bush and congressional lawmakers last week which could add between $160 million and $200 billion to the economy. The package will be voted on in the Senate next week.
Yesterday, data from the Energy Department reported last week's crude oil supplies rose 3.56 million barrels to 293 million.
Furthermore, tomorrow the Organization of Petroleum Exporting Countries will meet to discuss about oil output. Most market investors and economists speculate the organization, which provides 40 percent of oil to world's consumption, will not boost supplies.
Ahead of the gathering, OPEC's President Chakib Khelil said to reporters there's no need to increase output mentioning that members from the organization think there is enough crude to meet world's needs.
In addition to tomorrow morning's meeting, OPEC has scheduled another gathering for March 5.