* U.S. service sector contracts unexpectedly in November
* New U.S. weekly unemployment claims lowest in 14 months
* ECB keeps main interest rates as expected at 1 pct
(Recasts, updates with closing prices)
NEW YORK, Dec 3 (Reuters) - U.S. crude prices fell toward
$76 a barrel on Thursday as weak U.S. service sector data and
rising U.S. oil inventories outweighed losses in the dollar.
Data showed the U.S. services sector unexpectedly
contracted in November, with an index measuring activity fell
to its lowest reading since July and put pressure on U.S.
stocks. []. []
U.S. crude for January delivery <CLc1> settled at $76.46,
down 14 cents. London Brent crude <LCOc1> rose 48 cents to
$78.36 a barrel.
Oil traders have watched wider macroeconomic factors this
year for signs of a turnaround in the economy that could
support flagging fuel demand.
"The inventory situation is still providing a bearish
backdrop. But the dollar fell very close to recent lows versus
the euro, providing a lift to energy." said Tom Bentz, analyst
at BNP Paribas Commodity Futures in New York.
Crude prices tumbled on Wednesday after the release of U.S.
inventory data, which showed crude and gasoline inventories
jumped last week as the weak economy continued to batter demand
in the world's top consumer. []
Economic data was mixed on Thursday as new applications for
U.S. jobless benefits unexpectedly fell last week to the lowest
level in more than 14 months, suggesting a labor market edging
toward stability, while productivity was less robust in the
third quarter. []
The White House said a recent private sector payroll report
had signaled that November's unemployment level may tick up
from 10.2 percent in October, but stressed it was not
predicting the outcome of Friday's closely watched monthly
payroll data. []
"Crude oil futures are flat at this time as energy markets,
just like the stocks and currency markets, are awaiting
tomorrow's unemployment data," said Tom Knight, trader for
Truman Arnold in Texarkana, Texas.
The euro clung to gains against the U.S. dollar after the
European Central Bank announced its first steps to unwind some
of the extraordinary measures it took to prop up the euro zone
economy during the global crisis. []
Speaking after the ECB kept rates at a record low of 1
percent as expected, ECB President Jean-Claude laid out a
number of decisions on ending and tightening up the measures it
has taken to support liquidity in the banking sector.
[]
Investors have taken cash out of oil and other commodities
and into safe haven plays like the dollar at times this year
when negative economic data is released.
Kuwaiti Oil Minister Sheikh Ahmad al-Abdullah al-Sabah told
reporters the OPEC nation preferred oil prices remain in the
$70-80 a barrel range, adding he supported leaving crude output
targets unchanged when the producer group meets on Dec. 22 in
Angola. []
OPEC last year agreed to output cuts of 4.2 million barrels
per day as part of efforts to prop up oil prices and balance
markets, after slumping demand sent crude from record highs
near $150 a barrel in July 2008 to below $33 in December 2008.
[]
Adding to OPEC's challenges, the biggest non-OPEC oil
exporter Russia set a fourth consecutive monthly output record
in November, averaging more than 10 million barrels per day.
[]
For a graphic on the oil contango, click on:
http://graphics.thomsonreuters.com/129/CMD_OILSPRD1209.gif
(Reporting by Rebekah Kebede, Matthew Robinson, Gene Ramos and
Robert Gibbons in New York, Christopher Baldwin in London and
Nick Trevethan in Singapore; Editing by Marguerita Choy)
((matthew.robinson@thomsonreuters.com: +1 646 223 6052;
Reuters Messaging: matthew.robinson.reuters.com@reuters.net))
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