Investing.com - Oil prices reversed a rally on Thursday, closing back in on five-and-a-half year lows amid speculation over whether prices have bottomed out.
West Texas Intermediate crude oil futures for delivery in January were down 0.77% to $56.35 a barrel, after rising to session highs of $59.01. The January contract fell to lows of $53.94 a barrel on Tuesday, the weakest level since May 2009.
Benchmark Brent crude dipped 0.11% to $61.12 a barrel, off session highs of $63.65. Brent oil fell below $60 dollars a barrel for the first time since May 2009 on Tuesday.
Oil prices rallied earlier after the Federal Reserve said Wednesday it would be “patient” in deciding when to raise U.S. interest rates, guidance which it said is consistent with earlier assurances that rates would stay low "for a considerable time."
At the bank’s post policy meeting press conference Fed Chair Janet Yellen said the Fed was unlikely to raise rates for the “next couple of meetings” indicating that a move in April at the earliest is likely.
In the U.S., data on Thursday showed that the number of people who filed for unemployment assistance in the U.S. last week fell more-than-expected, pointing to an ongoing recovery in the labor market.
The Labor Department reported that number of individuals filing for initial jobless benefits fell by 6,000 to 289,000 from the previous week’s revised total of 295,000.
A separate report showed that manufacturing activity in the Philadelphia-region slowed in December after expanding at the fastest rate since December 1993 last month.
The Philly Fed manufacturing index came in 24.5 at this month, down from 40.8 in November, compared to forecasts for a decline to 26.6.
Oil prices have almost halved since June, pressured lower by a combination of concerns over the sluggish global demand outlook and ample supply.
The boom in the U.S. shale industry has led to a surplus in oil markets. Last month’s decision by the Organization of the Petroleum Exporting Countries not to cut output to support prices has also weighed.
The U.S. Energy Information Administration said in its weekly report Wednesday that U.S. crude oil inventories fell by 0.847 million barrels last week, compared to expectations for a decline of 2.36 million barrels.