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Oil prices mixed after US data

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(Globalpost/GlobalPost)

Oil prices diverged on Thursday as markets mulled mixed economic data out of the United States, the world's biggest consumer of crude.

Brent North Sea crude for delivery in April rose 41 cents to $112.28 a barrel in late London deals.

New York's main contract, light sweet crude for April, fell 23 cents to $92.53 a barrel.

"Price initially fell after the revised US fourth-quarter GDP number came in below expectations, although a larger-than-expected decline in weekly unemployment claims helped to offset some of the falls," said Fawad Razaqzada, an analyst at traders GFT Markets.

"Fundamentally, oil prices are unlikely to rise much in the short term as demand remains weak and supply abundant," he added.

In the US, the Commerce Department revised the final-quarter growth rate to a positive 0.1 percent, instead of a contraction of 0.1 percent. Economists had forecast a revision to 0.5 percent.

Separate government data showed new claims for US unemployment benefits fell last week to 344,000, in line with the recent trend after the previous week's spike higher.

But concerns were mounting Thursday that the "sequester" federal spending cuts expected to come into effect Friday would cause a spike in layoffs by government contractors and temporary government employees.

The IMF said the broad cuts would slow growth in the world's biggest economy and hit the global economy.

"There will be an impact on global growth," IMF spokesman Bill Murray said Thursday. "We're going to have to reevaluate our growth forecast in the United States and also our other forecasts."

On Wednesday, President Barack Obama's former chief of staff Jack Lew was confirmed as the next US Treasury secretary, taking over a key portfolio at a time of deadlock over the country's budget and debt.

The White House is now locked in a new showdown, this time with Republican lawmakers over how to avoid some $85 billion in across-the-board spending cuts that are set to kick in from Friday.

Lawmakers acknowledge the deadline will likely pass without a deal to avert the cuts, and that those negotiations would be rolled into next month's debate over 2013 government funding levels.

New York oil prices had climbed slightly Wednesday on encouraging US industrial data, but a rise in American stockpiles and more eurozone uncertainty capped gains, dealer said. Brent crude had hit a one-month low at $111.65 on Wednesday.

Crude futures fell on both sides of the Atlantic on Tuesday, with Brent closing down $1.73 a barrel, amid uncertainty stemming from Italy's inconclusive elections and expectations of fresh increases in bulging US crude inventories.

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http://www.globalpost.com/dispatch/news/afp/130228/oil-prices-mixed-after-us-data