Oil futures swing between gains and losses in volatile trade

Investing.com - Oil futures swung between significant gains and losses in choppy trade on Thursday, as investors eyed movements in the currency market for direction.

On the New York Mercantile Exchange, crude oil for delivery in February shed 34 cents, or 0.7%, to trade at $48.14 a barrel during U.S. morning hours. WTI held in a range between $47.18 and $51.21.

A day earlier, New York-traded oil futures surged $2.59, or 5.64%, to settle at $48.48 a barrel, as investors returned to the market to close out bets on lower prices. Nymex prices hit $44.20 on Tuesday, a level not seen since March 2009.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for March delivery declined 6 cents, or 0.11%, to trade at $49.81 a barrel. Brent traded in a range between $48.14 and $52.38 a barrel.

On Wednesday, London-traded Brent prices rallied $2.04, or 4.27%, to close at $49.86 a barrel, as traders repositioned their portfolios ahead of the expiration of the February contract. Brent touched $45.19 a barrel on Tuesday, the weakest level since April 2009.

London-traded Brent prices have fallen nearly 60% since June, when it climbed near $116, while WTI futures are down almost 58% from a recent peak of $107.50 in June.

Concerns over weakening global demand combined with indications that the Organization of the Petroleum Exporting Countries will not cut output to support oil markets have weighed on prices in recent months.

At the same time, increasing supplies of crude oil from North American shale formations have helped create a glut in world markets.

Oil prices hit the highest levels of the session after the Swiss National Bank announced that it would discontinue the minimum exchange rate of 1.20 per euro, while lowering interest rates further into negative territory.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, turned lower following the surprise decision. However, oil moved off the highs as the greenback recovered.

Meanwhile, market players digested a mixed bag of U.S. data.

The Federal Reserve Bank of Philadelphia said that its manufacturing index deteriorated to a reading of 6.3 this month from December’s reading of 24.5. Analysts had expected the index to decline to 19.9 in January.

The report came after the Federal Reserve Bank of New York said that its general business conditions index increased to 10.0 this month from a reading of -3.6 in December. Analysts had expected the index to rise to 5.0 in January.

On the index, a reading above 0.0 indicates improving conditions, below indicates worsening conditions.

Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits increased by 19,000 last week to 316,000, the highest in almost four months.

Analysts had expected initial jobless claims to decline by 6,000 to 291,000 last week from 297,000 in the preceding week.

In addition, the Commerce Department said that producer prices fell by a seasonally adjusted 0.3% last month, compared to forecasts for a 0.4% decline, after falling 0.2% in November.

The core producer price index eased up by a seasonally adjusted 0.3% last month, above expectations for a gain of 0.1% and following a flat reading in November.

Data on Wednesday showed that retail sales in the U.S. dropped by the most in 11 months in December, suggesting that the Federal Reserve could keep rates on hold for longer.