LONDON: Oil fell back from a year high on Thursday but stayed above $75 a barrel, reversing its sixth straight positive session after European shares pared gains and the euro fell on disappointing Q3 earnings reports, traders said.
US crude for November delivery rose 19 cent to $75.37 a barrel by 1303 GMT, after climbing as high as $75.96 earlier in electronic trading, its highest since October 2008.
London Brent crude was up 32 cents at $73.42.
At this stage the market is dominated by nothing commodity-driven – just the weaker dollar and earnings season, said CMC Markets analyst James Hughes.
Goldman Sachs quarterly earnings nearly quadrupled, topping expectations, but its shares fell on disappointment that so much of the profit came from trading gains that might not be sustainable.
US crude stocks fell 172,000 barrels last week against expectations of a 700,000 barrel rise, according to data from the American Petroleum Institute (API) on Wednesday.
The API overnight was slightly supportive, as there was a bigger-than-expected drawdown on gasoline, but really the market is waiting for confirmation in the DOE stats, said Tony Machacek, a broker at Bache Commodities in London.
Traders will look to US government Department of Energy s (DOE) Energy Information Administration (EIA) inventory data later in the trading session for confirmation that fuel demand in the world s largest economy is rising.
The EIA is due to release its report at 1500 GMT.
Initial claims for state unemployment benefits in the United States fell unexpectedly by 10,000 to a seasonally adjusted 514,000 in the week ended Oct. 10, the Labor Department said, the fifth such decline in the last six weeks.
Further support for crude came as the Dow Jones industrial average rose above 10,000 points for the first time in a year on Wednesday, while the dollar slumped to a fresh 14-month low against a basket of currencies.
Fundamentals warning
Crude, up 1.8 percent on the year, is now in positive territory on a year-on-year basis for the first time since Oct. 10, 2008. The six straight days of gains mark its longest winning streak since July.
Oil has marched in step with a recovery across markets, echoing rallies in equities, gold and base metals based on the view that economic recovery was gathering strength.
But traders and analysts remained wary that rising prices based on expectations of a revived economy were out of step with still fragile demand for oil.
There is currently no fundamental reason supporting a price rise and the path back to $100 per barrel will be a long and protracted one, analysts at JBC Energy in Vienna said in a note to clients.
Poor oil fundamentals, including 6 million b/d of OPEC spare capacity, a massive middle distillates stock surplus and terrible refining margins will keep the upside potential in check, JBC said. -Additional reporting by Jennifer Tan in Singapore.
