Investing.com - Oil prices dropped on Thursday on fears that despite an improving U.S. economy, supplies are far outstripping demand.
In the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in September traded down 2.28% at $97.99 a barrel during U.S. trading. New York-traded oil futures hit a session low of $97.96 a barrel and a high of $99.84 a barrel.
The September contract settled down 0.69% at $100.27 a barrel on Wednesday.
Nymex oil futures were likely to find support at $97.37 a barrel, the low from March 17, and resistance at $102.10 a barrel, Monday's high.
OPEC countries pumped more oil in July than in June, according to Reuters data, which sent oil futures dropping on fears the world is awash in crude.
Reuters reported that supply from OPEC member states averaged 30.06 million barrels per day (bpd) in July, up from 29.92 million bpd in June.
Fears that conflicts in the Middle East were going to disrupt supply never panned out, which softened oil prices despite consensus that the global economy continues to recovery, the U.S. especially.
Earlier Thursday, the Labor Department reported that the number of individuals filing for unemployment assistance in the U.S. last week rose by 23,000 to 302,000, largely in line with market expectations for jobless claims to rise by 22,000 to 301,000.
The Labor Department added that the employment cost index rose by 0.7% in the three months to June after a 0.3% increase in the first quarter. Economists had expected a 0.5% gain.
On Wednesday, the Commerce Department reported that the U.S. grew 4.0% on year in the second quarter, blowing past forecasts for a 3.0% reading.
Still, headwinds still battle the U.S. economy.
Market research group Kingsbury International said earlier that its Chicago purchasing managers’ index fell by 10.0 points to 52.6 in July from a reading of 62.6 in June. Analysts had expected the index to decline to 63.0 in July.
It was the biggest monthly fall since October 2008 and left the barometer at its lowest level since June 2013.
Separately, on the ICE Futures Exchange in London, Brent oil futures for September delivery were down 0.57% and trading at US$105.90 a barrel, while the spread between the Brent and U.S. crude contracts stood at US$7.91 a barrel.