“Brent crude oil fell below $108 a barrel on Thursday after comments by European Central bank President Mario Draghi raised the prospect of further weakness in the euro zone and a bleaker outlook for oil demand.

Oil prices reacted to the statement swiftly, falling more than 50 cents per barrel. Brent crude was down 0.9 percent to below $108 a barrel, after dropping for the past three sessions. U.S. crude lost about 1.4 percent to $86 a barrel.

The oil market was already worried about the prospects for oil demand.

The United States faces year-end tax increases and spending cuts that threaten to push the world's largest economy back into recession and dent demand from the world's top oil consumer.

The U.S. economy is growing again after a long slowdown, but economic activity is still sluggish and unemployment is high.

Ahead of the country's monthly non-farm payrolls, due on Friday, private payrolls processor ADP reported that private-sector employers added 118,000 jobs in November, fewer than expected, though activity in the service sector continued to expand.

The number of Americans filing new claims for unemployment benefits fell for a third straight week, but still remain too volatile to offer a clear signal on labor market conditions.

Initial claims for state unemployment benefits dropped 25,000 to a seasonally adjusted 370,000.


Oil also faced pressure after a U.S. inventory report showed big builds in oil products, with gasoline stocks up by the highest margin since 2001, surging by 7.86 million barrels to 212.12 million barrels in the week to Nov. 30.

The U.S. Energy Information Administration said U.S. stocks of distillates - diesel and heating oil - also rose at a time of the year when refined oil stocks often fall.

Across the Atlantic, data showing that euro zone shoppers cut back on spending in October by the biggest margin in six months also weighed on oil prices.

Ahead of OPEC's policy setting meeting next week, analysts eye the future development of production quotas.

Rising tensions in Egypt stoked supply fears as the country's Republican Guard ordered rival demonstrators to leave the area around the presidential palace in Cairo.

Israel is also in focus with its plans to build more settler homes in the West Bank, prompting the European Union to summon Israel's envoy.

U.S. fears of Syrian President Bashar al-Assad using chemical weapons and Iran saying that the U.S. was spying on its military sites and oil terminals added to concerns that supplies from the region could be disrupted.

Washington said there was no evidence to support Iran's assertion.”