(Updates with equity markets reversing, oil increasing decline)
* Oil prices fall on concern about oversupply
* U.S. jobless claims reinforce view of slower U.S. recovery
* Graphic: 2020 asset performance tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 tmsnrt.rs/2egbfVh
* Reuters Live Markets blog:
NEW YORK, Aug 20 (Reuters) - Oil prices fell, the dollar eased and equities rose, reversing earlier declines on Thursday as the near-term U.S. economic outlook dimmed and concerns mounted about excess crude stocks.
Oil fell more than 1% on Thursday after Reuters reported that some OPEC+ members would need to cut output by an extra 2.31 million barrels per day (bpd) to make up for recent oversupply.
The Organization of the Petroleum Exporting Countries and its allies, known an OPEC+, had said on Wednesday the oil market recovery appeared to be slower than anticipated with growing risks of a prolonged second wave of the pandemic.
U.S. crude futures settled down 35 cents, or 0.82%, at $42.58 per barrel. Brent crude futures settled at $44.90 per barrel, down 47 cents, or 1.04%.
Equities largely recovered from an initial slump that occurred after a surprise jump in U.S. jobless claims to more than 1 million in the week ended Aug. 15, reported on Thursday. The new data reinforced bearish Federal Reserve comments on Wednesday that said job growth had slowed.
The new jobless claims reading was well above the forecast of economists polled by Reuters that expected 925,000 new applications in the latest week.
“Anytime there’s concern about the economic recovery, that always hurts,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. While the long-term outlook for the economy is good, the latest jobless number and Fed comments show “economic weakness is not over by any means,” Ghriskey added.
Even so, shares of big technology producers and companies that use tech are rising because the demand for products has increased, from e-tailer Amazon.com Inc to insurer Progressive Corp, he noted.
The Dow Jones Industrial Average rose 21.19 points, or 0.08%, to 27,714.07, the S&P 500 gained 3.1 points, or 0.09%, to 3,377.95 and the Nasdaq Composite added 64.83 points, or 0.58%, to 11,211.30.
Economic concerns hit stocks earlier in the day, reflecting the Fed’s pessimism on Wednesday. MSCI’s benchmark for global equity markets fell 0.24% to 571.95, while its index for emerging markets stocks fell 0.5%.
Europe’s broad FTSEurofirst 300 index dropped 1.06% to 1,419.38.
The dollar had been gaining ground since hitting a 27-month low it hit on Tuesday. On Thursday, the dollar index fell 0.168%, with the euro up 0.13% to $1.1851.
The Japanese yen strengthened 0.22% versus the greenback at 105.89 per dollar, while Sterling was last trading at $1.3194, up 0.73% on the day.
Wall Street was knocked from its recent highs on Wednesday after the Fed’s minutes from its July meeting spooked investors by showing that the swift labor market rebound seen in May and June had likely slowed.
The S&P 500 had reached an all-time high earlier in the week as prices recovered to their pre-pandemic levels.
The sudden bearishness spilled into Asian markets overnight and continued in the European session, although shares started to recover as the morning progressed.
Several Fed policymakers said they may need to ease monetary policy to help get the economy through the coronavirus pandemic.
“It’s easy to forget that we’ve just experienced one of the largest and most severe economic shocks on record,” said Kaspar Elmgreen, head of equities at Amundi.
“This story is not over yet, despite what the markets might be indicating,” he said.
Spot gold rebounded overnight and after the U.S. jobless data on demand for the safe-haven asset.
Spot gold added added 0.8% to $1,945.61 an ounce. U.S. gold futures settled down 1.2% to $1,946.50 an ounce.
Reporting by Alwyn Scott, Herb Lash and Elizabeth Howcroft; Editing by Marguerita Choy and Steve Orlofsky
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