Jan. 31 (Bloomberg) -- Oil fell for the first time in four days as claims for U.S. unemployment benefits increased more than forecast last week.
Prices dropped from a four-month high as initial jobless claims rose to 368,000, the Labor Department reported. Economists forecast 350,000 filings, according to a Bloomberg survey. Oil is heading for the biggest monthly gain since August on speculation that stronger economic growth will boost demand.
“Sentiment is a little bit ahead of what the data is actually bearing out,” said Jacob Correll, a Louisville, Kentucky-based analyst at Summit Energy Inc., which manages more than $20 billion in companies’ annual energy spending. “It’s tough to sustain the upward move until we start seeing better, concrete data.”
West Texas Intermediate for March delivery slid 82 cents, or 0.8 percent, to $97.12 a barrel at 9:59 a.m. on the New York Mercantile Exchange. Trading was 21 percent above the 100-day average for the time of day. Futures rose to $97.94 yesterday, the highest close since Sept. 14. Prices are up 5.8 percent in January and poised for a third monthly increase.
Brent for March settlement fell 29 cents, or 0.3 percent, to $114.61 a barrel on the London-based ICE Futures Europe exchange. Trading was 3.5 percent below the 100-day average.
The jobless claims rose 38,000 in the week ended Jan. 26, the most since Nov. 10, the Labor Department said. The number of people who continue to collect jobless benefits climbed by 22,000 to 3.2 million in the week ended Jan. 19.
This month’s rally of oil prices “seems to be predicated more on expectations of economic growth in the future and every time we get a bit of cold water on that idea, the market has a tendency to experience some profit-taking,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “That’s what we are having today.”
The Labor Department, scheduled to release payroll data tomorrow, may report a 165,000 increase in January employment, according to a Bloomberg survey. The jobless rate held at 7.8 percent, the survey showed.
“There is still a lot of fundamental weakness in oil,” said Correll. “You see the big stock build in the U.S. And demand is still pretty low.”
U.S. crude inventories increased 5.95 million barrels in the week ended Jan. 25 to 369.1 million, the Energy Information Administration, the Energy Department’s statistics arm, reported yesterday. Analysts surveyed by Bloomberg expected a gain of 2.5 million.
Total petroleum demand fell 0.3 percent to 18.3 million barrels a day in the four weeks ended Jan. 25, the lowest level since the week ended March 30, the EIA reported.