Oil prices plunged Thursday as U. S. Federal Reserve Chairman Bernanke signaled a possible tapering of stimulus later this year.

In a statement issued in the wake of a two-day meeting of the Federal Open Market Committee, the Fed's policy setting panel, on Wednesday, the Fed said it would keep bonds buying "until the outlook for the labor market has improved substantially," given the moderate economic growth in the U.S. and the reality that the unemployment rate is still too high.

Bernanke, however, struck a hawkish chord at a news conference following the meeting. He said the Fed may slow down its pace of bond purchases later this year, and may end them around the mid of 2014, if the economy continues to improve.

The outlook for the Fed's stimulus tapering lifted up the dollar. A stronger greenback decreased the appeal of dollar-priced oil for non-American buyers.

On the economic front, a rising number of U.S. jobless claims last week weighed on the oil market. In the week ending June 15, the advance figure for seasonally adjusted initial claims stood at 354,000, an increase of 18,000 from the previous week's revised figure of 336,000, the U.S. Labor Department reported Thursday. The fresh figure was higher than analysts' estimates of rising to 340,000.

Moreover, the U.S. flash manufacturing Purchasing Managers' Index (PMI) slipped to 52.2 in June, slightly changed from the reading of 52.3 for the month of May, suggesting that the U.S. manufacturing expansion remained modest during June, said global financial information services company Markit in a report Thursday.

Also, U.S. existing-home sales rose 4.2 percent to a seasonally adjusted annual rate of 5.18 million in May from 4.97 million in April, according to the National Association of Realtors.

Light, sweet crude for July delivery lost 2.84 dollars, to settle at 95.4 dollars a barrel on the New York Mercantile Exchange.

Brent for August delivery went down 3.97 dollars, to close at 102.15 dollars a barrel. Endi

Go to Forum >>0 Comment(s)