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Oil steady near $74 as U.S. growth forecast to quicken

Oil was steady near $74 On Friday, headed for a third consecutive weekly drop, as the recovery of the U.S. economy has yet to boost fuel demand.

The U.S. economy probably grew at an annual rate of 4.6 percent in the fourth quarter, up from 2.2 percent in the third, a Reuters poll showed ahead of the data, due at 1330 GMT.

U.S. jobless claims fell
less than expected last week, the government reported on Thursday. President Barack Obama said in his State of the Union address on Wednesday that job creation would be his top priority.

“Even though the U.S. economy is growing, the key figure is the unemployment rate,” said Clarence Chu, an energy trader at Hudson Capital Energy in Singapore. “Until I see that the U.S. is consistently creating jobs for a few months in a row, I’m not convinced that demand will increase.”

Oil demand in the U.S. shrank 2 percent in the past four weeks from a year earlier. Japanese crude imports fell 2.6 percent in December and gasoline sales tumbled 2.4 percent, the Ministry of Economy, Trade and Industry (METI) said on Friday.

U.S. oil for March delivery CLc1 gained 9 cents to $73.73 a barrel by 0504 GMT. Prices touched $72.65 on Wednesday, the lowest intra_day price since Dec. 21, and are still down 12 percent from a 15_month high of just under $84 on Jan. 11.
London ICE Brent crude for March LCOc1 climbed 11 cents to $72.24.

Prices fell on Thursday after the U.S. dollar rose to its highest level in more than six months against the euro, which fell on concern over potential fiscal crises in European economies including Greece and Portugal. [USD/] A stronger dollar often indicates investors are funneling cash away from riskier assets such as commodities. It also can curb demand for crude oil from buyers who hold other currencies, since oil is priced in dollars.
Oil use in OECD countries will never return to 2006 and 2007 levels because of more fuel efficiency and the use of alternatives, International Energy Agency chief economist Fatih Birol told Reuters on Thursday.


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