Investing.com - Better-than-expected weekly U.S. claims numbers weakened oil prices on Thursday by strengthening the dollar.
A stronger greenback makes oil a less attractive commodity on dollar-denominated exchanges, especially in the eyes of investors holding other currencies.
In the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in November traded down 1.13% at $86.32 a barrel during U.S. trading. New York-traded oil futures hit a session low of $86.25 a barrel and a high of $87.94 a barrel.
The November contract settled down 1.73% at $87.31 a barrel on Wednesday.
Nymex oil futures were likely to find support at $86.06 a barrel, the low from April 17, 2013, and resistance at $91.79 a barrel, last Friday's high.
The U.S. Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending Oct. 4 fell by 1,000 to 287,000 from the previous week’s revised total of 288,000.
Analysts had expected jobless claims to rise by 6,000 to 294,000 last week, and the numbers strengthened the greenback, which offset dovish language out of the Federal Reserve.
On Wednesday the minutes of the Fed's Sept. 16-17 policy meeting revealed that several monetary authorities believe the bank's current language painted the wrong picture on the timing of rate hikes and that an interest rate rise should be tied to U.S. economic recovery.
The minutes also showed that the U.S. central bank cut its growth outlook due to a stronger dollar and concerns over global weakness.
Crude also remained under pressure after the U.S. Energy Information Administration said in its weekly report on Wednesday that oil inventories rose by 5 million barrels in the week ending Oct. 3, blowing past expectations for a gain of 1.6 million barrels.
The report also showed that gasoline stockpiles rose by 1.2 million barrels, confounding expectations for a drop of 1.0 million barrels.
The data came a day after the American Petroleum Institute said that U.S. crude inventories increased by 5.1 million barrels in the week ending October 3, more than expectations for a rise of 1.4 million barrels.
Separately, on the ICE Futures Exchange in London, Brent oil futures for November delivery were down 0.68% at US$90.76 a barrel, while the spread between Brent and U.S. crude contracts stood at US$4.44 a barrel.