Oil prices dip on report of rising jobless claims

NEW YORK - Energy prices fell Thursday after the government reported that jobs remain in short supply in the U.S., with natural gas falling to new seven-year lows.

The Labor Department said the number of first-time unemployment claims rose unexpectedly for the second straight week. Less people heading off to work means the country will be consuming less gasoline.

Benchmark crude for October delivery gave up 92 cents to settle at $72.91 on the New York Mercantile Exchange. The September contract, which ends Thursday, advanced 12 cents to settle at $72.54.

Natural gas prices dropped nearly 5 percent on the same day the government reported that U.S. natural gas supplies continue to build well above normal rates for this time of year.

Oil traders have been looking for signs of economic recovery, expecting that global energy consumption would follow. Crude prices spiked Wednesday when government data showed a heavy drawdown in U.S. oil supplies, in part because refiners were importing less.

But the jobless numbers showed that energy consumption may remain subdued for some time.

The Energy Information Administration also reported Thursday that the country's stockpile of natural gas continues to grow, expanding last week to 19.1 percent above the five-year average. U.S. storage facilities have been bloated for months with large amounts of unused natural gas because major industrial customers have cut back severely on energy use.

Elsewhere, economic reports gave a mixed look at the health of the economy.

The Conference Board's measure of employment, stocks and other leading economic indicators showed the recession has likely bottomed out and may end this summer.

But the Mortgage Bankers Association said Americans homeowners continue to struggle with their finances. More than 13 percent of homeowners with a mortgage are either behind on their payments or in foreclosure, the association said.

At the pump, retail gasoline prices fell less tha n a penny overnight to a new national average of $2.624 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 16.6 cents more expensive than last month, but it's $1.093 cheaper than the same time last year.

In other Nymex trading, gasoline for September delivery fell 3.27 cents to $2.0019 a gallon, and heating oil for September delivery gave up 2.67 cents to $1.8920 a gallon. Natural gas for September delivery lost 14.6 cents to fetch $2.973 per 1,000 cubic feet.

In London, Brent prices fell 80 cents to $73.79 a barrel on the ICE Futures exchange.

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Associated Press writers George Jahn in Vienna and Alex Kennedy in Singapore contributed to this report.