Crude oil dropped in New York trading, paring weekly gains, as investors sold contracts to seal in profit after prices rose to more than $73 a barrel this week on expectations of higher demand, Bloomberg reported.

Crude oil for October 2009 delivery fell as much as $0.51, or 0.7%, to $71.96 a barrel in electronic trading on the New York Mercantile Exchange. It was at $72.05 a barrel at 11.08am Singapore time.

Oil prices had risen this week following reports of an expansion in the housing and industrial markets in the US. Crude has traded between $67 and $73 since 1 September 2009.

US Economy

The number of US citizens filing first-time claims for jobless benefits dropped unexpectedly last week, a sign the labour market is deteriorating at a slower pace. The US Labor Department data said that applications declined by 12,000 to 545,000 in the week ended 12 September, from a revised 557,000 the week before.

The Energy Department said that the US crude oil stockpiles fell 4.73 million barrels to 332.8 million last week. Those inventories are still “above the upper boundary of the average range for this time of year,” the report said.

Brent crude oil for November 2009 settlement declined as much as $0.45, or 0.6%, to $71.10 a barrel on the London-based ICE Futures Europe exchange. The contract fell $0.12 to end the session at $71.55 a barrel yesterday.