Oil prices close lower

AAP

NYMEX

Oil prices closed lower on Thursday, giving back gains after getting an early boost from lower US jobless claims and crude inventories.

Benchmark oil for October delivery fell 42 US cents to settle at $US74.25 a barrel on the New York Mercantile Exchange.

The Labor Department said new claims for unemployment benefits dropped by 27,000 last week, more than economists expected. That helped push stock prices up in early trading as the stock market rose. Energy traders have been watching the direction of stocks for signs of confidence in the economy, which could increase oil and gas demand.

The Energy Department's Energy Information Administration said crude inventories fell by 1.9 million barrels last week from the week before. Analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., expected a drop of 730,000 barrels. Supplies of gasoline and distillates fell as well.

In other trading in October contracts, heating oil gave up 1.33 US cents to settle at $US2.0684 a gallon, and gasoline lost 0.4 of a US cent to settle at $US1.9354 a gallon.

In London, Brent crude fell 70 US cents to settle at $US77.47 on the ICE Futures exchange.

COMEX

Gold prices swooned further in late trading on Thursday, adding to losses in light volume as some investors unwound safe-haven trades, setting off automatic sell orders on the way down.

Earlier, gold prices came off modestly when US weekly filings for unemployment benefits fell by more than forecast and the US international trade gap shrank by more than anticipated, but losses were limited.

US gold futures for December delivery closed down $US6.60 at $US1,250.90 an ounce.

Silver slipped to $US19.81 an ounce, against $US19.88 on Wednesday when it hit its highest level since early 2008 as investors sought a cheaper alternative to gold.

Platinum was last quoted at $US1,551.50 an ounce, compared with $US1,554.00 the day before, while palladium was at $US521.0 compared with $US522.00 on Wednesday.

LME

Industrial metals were hit hard on Thursday, with zinc suffering its biggest one-day loss in 2-1/2 months and copper sinking to its lowest in a week, after talk of a Chinese investigation into trading on the Shanghai rubber market slammed investor sentiment.

The base metals complex never fully recovered from the abrupt sell-off in the first two hours of Shanghai trade, as news about the China probe sparked fears the investigation could spread to other markets.

London Metal Exchange zinc shed $US66 to close at $US2,153 a tonne, after tumbling earlier 6.5 per cent to $US2,075.25 a tonne.

LME copper for three months delivery was last bid at $US7,554 a tonne in closing kerb trades, versus $US7,675 a tonne on Wednesday.

Aluminum was last bid at $US2,105 a tonne versus $US2,160 on Wednesday. LME stocks of the metal dipped 5,150 tonnes to remain near record levels at 4.41 million tonnes.

Nickel ended at $US22,750 from $US22,900.

Lead ended at $US2,201 from $US2,234, while tin ended at $US21,700 a tonne from Wednesday's $US21,675 a tonne, having earlier hit $US21,800, its highest since August 2008.