Oil Little Changed After Falling on U.S. Jobless Claims, Stocks

May 22 (Bloomberg) -- Crude oil was little changed near $61 a barrel in New York, after falling yesterday as jobless claims in the world’s largest oil-consuming nation topped economists’ forecasts and equities dropped for a third day.

The Standard & Poor’s 500 Index slipped 1.7 percent to 888.33 and the Dow Jones Industrial Average fell 1.5 percent to 8,292.13. Fuel demand in the past four weeks fell 7.6 percent from a year earlier, the U.S. Energy Department said May 20.

“For the last three or four months oil has been following the stock market,” Adam Sieminski, the chief energy economist at Deutsche Bank AG in Washington, said on Bloomberg Television.

Crude oil for July delivery rose 17 cents to $61.22 a barrel on the New York Mercantile Exchange at 9:40 a.m. in Sydney. Yesterday, the contract declined 99 cents, or 1.6 percent, to settle at $61.05 a barrel.

“There’s been a convergence between equities and the oil market,” said Brad Samples, a commodity analyst for Summit Energy Inc., an energy-management company in Louisville, Kentucky. “The trend continues and we are trading in sympathy with equities.”

Initial jobless claims fell by 12,000 to 631,000 in the week ended May 16 from a revised 643,000 the prior week that was higher than first estimated, the Labor Department said in Washington. Economists surveyed by Bloomberg had forecast jobless claims would drop to 625,000, according to the median of 42 estimates. The total number of workers receiving benefits rose to a record, a sign that the job market continues to weaken even as the economic slump eases.

OPEC Production

Crude stockpiles dropped by 2.11 million barrels last week to 368.5 million, the Energy Department said May 20. Gasoline supplies plunged 4.34 million barrels to 204 million.

Gasoline for June delivery rose 0.5 percent to $1.8078 a gallon in New York at 8:59 a.m. in Sydney. Yesterday, it declined 0.5 percent, to end the session at $1.7997.

The Organization of Petroleum Exporting Countries isn’t likely to reduce production quotas at its meeting in Vienna on May 28 because a further cut could hurt the ailing economy, the group’s former secretary-general said yesterday. OPEC agreed last year to three production cuts to bolster prices.

“I don’t see any indications that OPEC is seriously considering cuts,” Adnan Shihab-Eldin said yesterday at the Utilities Expansion conference in Dubai. “OPEC does not want prices to be at such a point that it jeopardizes the recovery.”

OPEC is likely to keep output quotas unchanged for a second time this year as recovering oil prices forestall the need for new supply cuts, according to a Bloomberg survey. The group will maintain a production target of 24.845 million barrels a day when it meets May 28, according to 25 of 27 analysts surveyed.

Brent crude for July settlement fell 66 cents, or 1.1 percent, to end the session at $59.93 a barrel on London’s ICE Futures Europe exchange.