Oil prices eased toward $72 a barrel on Thursday, after rising more than 4 percent in the previous session, as optimism faded about the pace of demand recovery in the world's top consumer the United States.
U.S. crude for September delivery, which expires on Thursday's close, was down 8 cents at $72.34 a barrel at 1320 GMT (9:20 a.m. EDT) after settling $3.23 higher at $72.42 on Wednesday.
The U.S. crude contract for October was down 53 cents at $73.30 a barrel. London Brent crude for October fell by 75 cents to $73.84.
Prices were pressured by a surprise rise in the number of U.S. workers filing new claims for jobless benefits last week, up to 576,000 from 561,000 the week before.
Data from the U.S. Energy Information Administration on Wednesday showed U.S. crude stockpiles plunged by a surprise 8.4 million barrels in the week to August 14 against analysts' forecasts for a 1.3 million barrel build. That pushed the market up on Wednesday.
But a consensus began to emerge on Thursday that this was due to a drop in imports rather than genuine signs that U.S. fuel demand was on the rise.
I think now there's a more realistic view of what the U.S. data means. There is still a lot of uncertainty about the economic recovery and how fast it will be, said EGL analyst Andy Sommer.
Earlier, prices jumped in response to a 4.5 percent surge in Chinese stocks on Thursday following modest signs of official support for the market which has fallen sharply over the last two weeks.
U.S. crude prices have been volatile this week, trading in a wide $8 range in response to mixed signals about the pace of economic recovery.
We expect prices to remain volatile, as the overall demand picture remains weak, and as equity markets and the dollar continue to play major roles in influencing trading direction. said David Moore, commodity strategist with the Commonwealth Bank of Australia.
Analysts said that the market could again push higher on Thursday if U.S. July leading economic indicators and weekly jobless claims were positive.
The release of first-time claims for jobless benefits for the week ended August 15 at 1230 GMT, and July leading economic indicators at 1400 GMT (10:00 a.m. EDT), are expected to show a gradual, nascent recovery in the U.S. economy.
On the supply front, increased oil output to a year-high from OPEC president Angola, flouting agreed limits, has helped stack the odds against any formal change when the producer group meets in September.
Without a sharp slide in crude prices, the producer group is likely to leave its output targets unchanged when it meets on September 9, most OPEC delegates and analysts said.
(Additional reporting by David Sheppard in London and Jennifer Tan in Singapore; editing by William Hardy)