Crude oil drifts lower on U.S. employment data

Crude oil prices stumbled out of the gate in morning trading Thursday in New York as U.S employment figures fell, pulling pressure away from the demand side.

The U.S. Labor Department said seasonally adjusted initial claims for unemployment increased by 10,000 for the week ending Feb. 20 to 272,000. Employment has been a bright spot in a U.S. economy wary of the pressure on industries from lower crude oil prices.

In mid-February, U.S. Federal Reserve Chair Janet Yellen said a weak energy sector was dragging on economic growth prospects.

Crude oil prices turned positive after a weak opening in Wednesday trading after U.S. data showed an increase in gasoline demand, a trigger likely attributed to a milder winter.

Crude oil prices started the day lower in New York, however. Brent crude oil lost 0.3 percent to start the day at $34.30 per barrel. West Texas Intermediate, the U.S. benchmark price for crude oil, was down by 0.6 percent to open at $31.95 per barrel.

Midterm U.S. labor figures showed resiliency, however. No state reported an increase of more than 1,000 in initial claims. The less-volatile four-week national average of 272,000 was a reduction of 1,250 from the previous week.

Data released from the U.S. Energy Information Administration show markets still favoring the supply side. Crude oil inventories for last week increased 3.5 million barrels to hit an all-time peak above 507 million barrels, data show.

Lower crude oil prices have left energy companies with few options but to trim spending and headcounts. Continental Resources, one of the largest leaseholders in U.S. shale basins, said this week it took a loss for the fourth quarter but still managed to pull more liquids from its key reserve, the Bakken play in Montana and North Dakota.