Oil prices drop on jobless claims

NEW YORK — Oil dropped Thursday on higher U.S. unemployment claims and concerns about less demand for oil and gas.

Benchmark West Texas Intermediate oil lost 95 cents at $84.18 per barrel in New York. Brent crude, which is used to price oil produced abroad, fell 49 cents to $109.66 per barrel in London.

Oil fell after the government said the number of people seeking unemployment benefits increased last week. The Labor Department said the number of applications was the highest in five weeks, although it was inflated by a strike at Verizon. When fewer people drive to work, demand for gasoline generally goes down.

Meanwhile gasoline pump prices increased nearly a penny to a national average of $3.582 per gallon. A gallon of regular has fallen 40 cents since peaking in May near $4 per gallon, but it’s still almost 89 cents more than a year ago.

East Coast refineries are bracing for the possibility that Hurricane Irene could disrupt operations beginning this weekend. Refineries in Delaware, New Jersey, Pennsylvania and Virginia produce nearly 8 percent of the country’s gasoline and diesel fuel. If they shut down due to the storm, it may push fuel prices higher.

In other energy trading, heating oil was virtually unchanged at $2.9656 per gallon and gasoline futures rose about a penny at $2.7671 per gallon. Natural gas was up 4.1 cents at $3.963 per 1,000 cubic feet after the government said the nation’s supplies rose last week.