Declining crude inventories cushion oil price fall

(Bloomberg) --Oil pared losses as declining U.S. crude and fuel inventories eased concerns following reports of a sluggish labor market.

Futures in New York declined as much as 4.4% on Thursday, the largest intraday drop in about two weeks, before easing losses. An Energy Information Administration report showed domestic crude supplies fell by nearly 4 million barrels last week, while distillate inventories tumbled by the most since 2003. Still, supplies at the Cushing, Oklahoma, fstorage hub rose for a fourth straight week.

Prices had traded lower earlier in the session after applications for U.S. state unemployment benefits unexpectedly jumped last week to the highest since August, boding poorly for a sustained recovery in demand. Meanwhile, Paris and London are facing renewed restrictions as Covid-19 cases continue to rise.

West Texas Intermediate crude futures for November delivery fell $1.08 to $39.96 a barrel at 11:04 a.m. in New York. Brent for December delivery declined $1.01 to $42.31 a barrel on the London-based ICE Futures Europe exchange.