Oil futures appear to be losing momentum for investors this week in light of renewed concern about the economic recovery, both in the U.S. and overseas.
Stock markets around the world were already jittery in light of the ongoing debt situation in the European Union, where some member states are considered candidates for a sovereign debt default in the foreseeable future.
Such a scenario could result in billions of dollars in fresh losses for banks across Europe and elsewhere, and it could become closer to reality as nervous investors push bond rates higher – making borrowing more expensive in the process for these countries, most notably Greece.
Oil futures generally tend to rise and fall with the economic outlook – and with that in mind, investors were also disheartened Thursday by the release of data showing a surprising upswing in first-time unemployment claims last week. According to the Department of Labor, 471,000 workers filed for unemployment benefits last week, marking an increase of 25,000 from the previous week.
Another factor to consider with oil futures at this point is supply. The Energy Information Administration reports that as of May 14, there were about 362.6 million barrels of crude oil stocks in the U.S. market. That figure was the highest amount recorded in nearly a year.
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