U.S. crude oil futures lost further ground on Thursday, posting the biggest one-day percentage loss since July, due to a stronger dollar and weak U.S. oil demand that raised more worries about the sluggish economic recovery. Heating oil and gasoline futures fell sharply with crude.
"Crude futures are sliding on the strength of the dollar and as oil demand remains very, very weak," said Peter Beutel, president of Cameron Hanover, in Stamford, Connecticut. "We have a backward situation in that what is good for the dollar is not good for commodities. At this point, investors fear that the U.S. economy is taking a lot longer to recover," he added.
The euro hit a seven-month low against the dollar on Thursday amid ongoing concerns over the fiscal health of some euro zone countries. Wall Street tumbled as the number of Americans claiming jobless benefits rose unexpectedly and renewed fears of sovereign debt problems in Europe led investors to dump riskier assets.
The number of U.S. workers filing for jobless benefits unexpectedly rose last week, but another big gain in productivity in the fourth quarter offered hope that companies were getting close to adding to payrolls.
