Oil prices fell below $54 a barrel Thursday as dismal U.S. economic data and rising crude inventories outweighed the possibility of production cuts by OPEC and Russia.
By midday in Europe, light, sweet crude for January delivery was down $1.19 to $53.25 a barrel in electronic trading on the New York Mercantile Exchange.
Markets in the United States were closed Thursday for the Thanksgiving holiday, but electronic trading on the Nymex continued.
The dollar’s weakening against other major currencies helped the Nymex contract recover from a low of $52.62 earlier in the session. Investors tend to increase their holdings in commodities like oil when the dollar falls and as a hedge against inflation.
In London, January Brent crude fell 65 cents to $53.27 on the ICE Futures exchange.
Prices have hovered just above three-year lows this week as bad economic news painted a bleak picture of U.S. demand for crude.
The Commerce Department on Wednesday said orders to U.S. factories for big-ticket manufactured goods plunged in October by the largest amount in two years. The 6.2 percent drop was more than double the 3 percent decline economists expected.
The department also said Americans cut their spending in October by the largest amount since the 2001 terrorist attacks. Consumer spending plunged by 1 percent last month, worse than the 0.9 percent decline that had been expected.
The fall in consumer spending has shown up in rising oil and gasoline inventories. For the week ended Nov. 21, crude stocks jumped by 7.3 million barrels, the Energy Department’s Energy Information Administration said in a weekly report Wednesday.
Analysts had expected a boost of only 400,000 barrels. Gasoline inventories rose by 1.9 million barrels. Analysts expected stockpiles to rise by only 300,000 barrels
“It looks like $50 is a support level,” said Gerard Rigby, an energy analyst with Fuel First Consulting in Sydney. “But when it gets up to $54, people take profits. No one wants to get too bullish.”