By The Associated Press
NEW YORK (AP) - Good news was bad news for the oil market on Thursday.
The U.S. Labor Department said that the average number of people who applied for unemployment benefits dropped to the lowest level since November 2007, the month before the Great Recession began. But that added to speculation that the Federal Reserve would soon pull back on measures that have kept long-term interest rates at low levels.
The Fed's policies have sparked investment in riskier assets such as stocks and oil. But comments from Fed officials this week indicate the central bank may be ready to begin unwinding a program of buying $85 billion in bonds each month as soon as September.
Benchmark crude fell 97 cents to close at $103.40 per barrel on the New York Mercantile Exchange. Oil fell as low as $102.22 before paring its losses in the afternoon.
Concern about the Fed overshadowed positive economic news from China. The country's exports and imports both increased last month, beating expectations and representing a strong recovery from June's slump. That suggested growth in the world's No. 2 economy might eventually pick up following months of sluggishness.
Pump prices in the U.S. maintained a downward trend. The average price for a gallon of regular dropped a penny to $3.59. That's 4 cents lower than a week ago.
Brent crude, traded on the ICE Futures exchange in London, fell 76 cents to $106.68 a barrel.
In other energy futures trading on Nymex:
- Heating oil fell 1 cent to $2.92 a gallon.
- Natural gas rose 5 cents to $3.30 per 1,000 cubic feet.
- Wholesale gasoline slipped 1 cent to $2.86 a gallon.
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