* Oil weakens as dollar recovers
* Weak U.S. economic data casts doubt on pace of recovery
* U.S. crude oil build weighs on sentiment
(Updates detail, prices)
By Christopher Johnson
LONDON, Feb 25 (Reuters) - Oil fell by nearly $2 per barrel
on Thursday to about $78, dragged down by a rise in the dollar
as the euro slid on concerns about the outlook for the European
economy and after a surprise jump in U.S. unemployment.
The euro fell to a one-year low against the yen and was down
versus the dollar on uncertainty over the ability of the Greek
government to cope with its fiscal crisis, while the dollar's
trade-weighted index rebounded. []
U.S. crude futures for April <CLc1> were down $1.80 per
barrel at $78.20 by 1420 GMT, after hitting a low of $77.88.
The contract rose more than $1 on Wednesday, lifted by
comments by U.S. Federal Reserve Chairman Ben Bernanke, who
stressed his commitment to low U.S. interest rates.
London Brent crude <LCOc1> lost $1.68 to $76.41 a barrel.
A firmer dollar makes oil and other commodities more
expensive for holders of other currencies, and also dragged gold
down to near a two-week low. <GOL/>
U.S. jobless claims data meanwhile suggested the world's
biggest energy consumer was recovering more slowly than
expected. The number of U.S. workers filing initial claims for
unemployment benefits rose unexpectedly in the latest week, a
U.S. Labor Department report showed on Thursday. []
DOLLAR
Carsten Fritsch, analyst at Commerzbank, said the rise in
the dollar had started the move lower.
"The dollar put pressure on commodities prices across the
board," he said "It is encouraging profit-taking after recent
price gains, which clearly don't seem to be justified by
fundamentals."
Oil prices have risen by around $10 per barrel since hitting
a low below $70 in the first week of February and are still
close to the top of their trading range over the last year.
Edward Meir, analyst at brokers MF Global, said he saw the
direction of the dollar as "the predominant guiding force" in
the oil market.
"We suspect that the dollar still has more room to run on
the upside...and as a result, should keep the downward pressure
on commodities for a little while longer," Meir said.
U.S. data this week has dampened expectations of a quick
rebound from the deep economic slowdown of the last two years.
U.S. crude oil stockpiles rose by 3 million barrels to 337.5
million barrels in week ended Feb. 19, data from the Energy
Information Agency showed on Wednesday. But U.S. gasoline
inventories fell 900,000 barrels to 231.2 million barrels,
versus analysts estimates of a 400,000-barrel build. []
U.S. refiners normally start stockpiling in April for the
driving season, which starts at the end of May and peaks in
June-July.
(Editing by James Jukwey)
