Oil settles down despite promising mid-day rally

Thu Jan 15, 2015 4:04pm EST
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By Samantha Sunne

NEW YORK (Reuters) - Oil prices declined on Thursday as an erratic dollar and expectations of weakening demand dashed hopes that a strong rally Wednesday might have signaled a bottom to the seven-month price rout.

"I think you're getting confirmation that yesterday's price move may have just been a blip," said Brian LaRose, a technical analyst with United-ICAP.

Wednesday's surge was the biggest in 2-1/2 years and continued early Thursday, with both benchmarks breaking above $50 before giving back gains.

Trading was choppy as U.S. crude briefly surged ahead of Brent early in the day. The move came on the last day of trading for the Brent contract.

"It's been such a choppy week," said Carl Larry, director of business development at Frost & Sullivan. There's "a lot of economic data out there that's kind of flip-flopping the market."

Brent crude LCOc1 closed at $47.67 after a drop of $1.02. U.S. crude CLc1 settled down $2.23 a barrel at $46.25.

The Swiss National Bank abandoned its cap against the euro, pushing the Swiss currency up sharply and depressing the euro.

But the dollar's movements were erratic over the course of the day, and expectations of lessening demand across the globe depressed the markets.   Continued...

A pump jack is seen at sunrise near Bakersfield, California October 14, 2014.  REUTERS/Lucy Nicholson