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Oil wavers as concerns about future demand offset encouraging US jobs report
Oil is wavering between small gains and losses as uncertainty about demand overshadows positive news about jobless claims.
Benchmark West Texas Intermediate oil rise 21 cents to $83.10 per barrel Thursday morning on the New York Mercantile Exchange. In London, Brent crude dropped $1.10 to $105.58 per barrel on the ICE Futures exchange.
Oil has been volatile as investors sort through mixed signals about the global economy. Benchmark crude has ranged from $78 to $85 a barrel this week.
The Labor Department says the number of people seeking unemployment benefits fell last week, a sign that the job market may be improving.
That's tempered by concerns about the European economy.
At the pump, AAA says gas prices average $3.62 a gallon nationally.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
SINGAPORE (AP) ' Oil prices rose above $84 a barrel Thursday in Asia amid signs global crude demand may be stronger in the second half than previously expected.
Benchmark oil for September delivery was up $1.49 cents to $84.38 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. Crude rose $3.59, or 4.5 percent, to settle at $82.89 on Wednesday.
In London, Brent crude was up 47 cents to $107.15 per barrel on the ICE Futures exchange.
Traders are trying to gauge the impact plunging equity and commodities prices could have on economic growth and demand for crude. Oil investors usually look to stock markets as a barometer of overall investor sentiment, but crude rallied Wednesday despite a 4.6 percent fall in the Dow Jones industrial average.
Asia stocks were mostly lower Thursday but fell much less than Wall Street.
"Although the sovereign crisis and associated risk-off trade have hit energy markets, we do not see sharply weaker energy fundamentals," Barclays Capital said in a report. "Demand remains robust, most notably outside developed countries."
Oil prices, which have fallen about 28 percent since May, were bolstered by an unexpected drop in U.S. crude supplies, suggesting demand may be improving. The Energy Department's Energy Information Administration said Wednesday that crude inventories fell last week by 5.2 million barrels while analysts had estimated that supplies would rise by almost 2 million barrels.
"This was one of the most bullish reports we have seen this year," energy analyst and trader Blue Ocean Brokerage said in a report. "Those are some pretty hearty numbers for an economy that is supposedly in the midst of another double-dip recession."
Earlier this week, the International Energy Agency and OPEC cut their outlooks for global oil demand growth this year. However, both groups expect demand to rise next year.
In other Nymex trading in September contracts, heating oil rose 3.7 cents to $2.90 a gallon while gasoline gained 4.8 cents at $2.83 a gallon. Natural gas futures fell 1.1 cents at $3.99 per 1,000 cubic feet.