* 2-day slide exceeds 4 pct for Brent, US crude, US gasoline
* U.S. oil inventories at highest level since 1990
* Coming up: US March nonfarm payrolls 8:30 a.m. EDT Friday
(Adds settlement, volume numbers)
By Anna Louie Sussman
NEW YORK, April 4 Brent crude prices hit a
five-month low near $105 a barrel on Thursday as a jump in U.S.
jobless claims triggered a second day of widespread selling in
oil markets, but the benchmark crude pared losses late in New
York as the euro strengthened.
Over the last two sessions Brent, U.S. crude and U.S.
gasoline have all lost more than 4 percent, with traders citing
ample supplies and concerns about demand.
Brent crude settled down 77 cents at $106.34 a
barrel. That was more than a dollar above the session low of
$105.29, which was the lowest level since early November.
U.S. crude oil futures settled at $93.26, down $1.19
but also more than a dollar above the day's low. U.S. gasoline
futures settled down almost 2 cents at $2.90 a gallon.
Total Brent crude trading volume was 37 percent above the
30-day moving average, but was down slightly from the previous
session when more than a million contracts changed hands.
Trading volume surged early in New York after data showed
U.S. initial jobless claims hit a four-month high last week,
indicating the labor market recovery in the world's largest oil
consumer slowed in March.
The previous session, oil slumped when the U.S. government's
Energy Information Administration (EIA) report showed crude oil
inventories at a 22-year high.
"Data has been disappointing all week long, and the
oversupply of crude just confirmed that," said Bill Baruch,
senior market strategist at iitrader.com LLC in Chicago.
"Now the market is getting back to where we should be."
The dollar rose more than 3 percent and the euro more than 4
percent versus the yen after the Bank of Japan unleashed the
world's most intense burst of monetary stimulus, promising to
inject about $1.4 trillion into the economy in less than two
As gains in the euro outstripped the dollar late in the New
York session, oil prices climbed off their lows. A weaker dollar
can boost dollar-denominated commodity prices as they become
cheaper for holders of other currencies.
"The jobless claims added to the pressure after the Bank
of Japan's decision to pump money created a big rally in the
dollar and U.S. debt in a safe-haven play," said Phil Flynn,
analyst at Price Futures Group in Chicago.
U.S gasoline futures edged back up after breaking through
their 100- and 200-day moving averages, technical measures that
traders watch closely.
Stephen Schork, editor of the commodities newsletter The
Schork Report, warned heavy selling in RBOB gasoline this week
was "the smoking gun showing we're in a market that got itself
"Wall Street tipped its hand and made a very bad trade in
trying to get long in RBOB gasoline, but now we're looking at
normalized inventories and weak demand," Schork said.
Wednesday's EIA report showed four-week average gasoline
demand was down 1.2 percent from year-ago levels.
Hedge funds and other large speculators had amassed bets on
rising gasoline prices equivalent to more than 80 million
barrels of the motor fuel as of March 26, data from the U.S.
Commodity Futures Trading Commission showed last week.
That was up from around 59 million barrels four months ago.
On Friday the U.S. government releases its closely watched
nonfarm payrolls report for March.
(Editing by Bob Burgdorfer and David Gregorio)