By Robert Gibbons
NEW YORK (Reuters) - Brent and U.S. crude futures fell on Thursday in volatile trading as investors awaited the Federal Reserve's interest rate decision later in the day.
The U.S. central bank will have an announcement at 2 p.m. EDT, which could signal the first U.S. interest rate rise for a decade.
Economists saw about a one-in-four chance of a rate increase. The dollar eased ahead of the announcement. A weaker U.S. currency can be supportive to dollar-denominated commodities like oil.
Oil futures felt pressure on Thursday after weak Japanese data revived fears over the prospects for global growth.
Japan's exports slowed a second straight month in August, a sign that China's economic slowdown could be damaging the world's third-biggest economy.
The Japanese figures follow worrying data from other Asian economies, including South Korea and Taiwan, creating anxiety over possible effects of slower growth in China.
"Brent structure has been appreciably weaker than that of WTI (U.S. crude) as it remains much more sensitive to the bearish element of increasing availability of North Sea barrels, excessive OPEC output and Chinese economic concerns," Jim Ritterbusch, president at Ritterbusch & Associates, said in a note.
Brent crude for November delivery (LCOc1) was down $1 at $48.75 a barrel at 12:14 p.m. EDT, having swung from $48.48 to $50.14.
U.S. October crude (CLc1) was down 36 cents at $46.79, having traded from $46.33 to $47.71.
Brent's premium to U.S crude
Rising gasoline stocks and gas oil inventories at an all-time high at the Amsterdam-Rotterdam-Antwerp hub were another bearish factor on Thursday.
Supportive U.S. jobless claims data on Thursday offset some of the gloom about Asia, briefly turning oil higher.
The number of Americans filing new applications for unemployment benefits fell last week to the lowest level in eight weeks, suggesting the U.S. labor market was strong despite a tightening in financial market conditions.
"The big drop in U.S. weekly jobless claims is very supportive for the demand outlook," said John Kilduff, partner at Again Capital LLC in New York.
U.S. crude stocks fell last week, both industry and government data released this week showed, lending support to oil futures.
U.S. oil output has begun to ease after six years of sharp increases. Energy Information Administration data shows U.S. crude and condensate production peaked at 9.612 million barrels per day (bpd) in April and had declined by 316,000 bpd by June.
