A build in U.S. crude oil inventories, coupled with a short-term rise in unemployment, added to negative pressure building on oil prices in Thursday trading.

The U.S. Federal Reserve said last week the U.S. economy is expected to expand at a moderate pace, with labor markets gaining momentum for the year. Global economic and financial developments, however, pose risks to the health of the U.S. economy.

The U.S. Labor Department reported seasonally adjusted first-time claims for unemployment rose 6,000 for the week ending March 19 to 265,000, highlighting risks to an otherwise bright spot in the U.S. economy.

Security risks in Europe in the wake of Tuesday's terrorist attacks in Brussels added to concerns about a European economy recording a negative rate of inflation, pushing crude oil prices lower this week.

Brent crude oil slumped 2.3 percent after the release of Labor Department data to trade at $39.52 per barrel. West Texas Intermediate, the U.S. benchmark price for crude oil, lost 2.7 percent to start the trading day Thursday at $38.71 per barrel. Oil prices are down nearly 5 percent from Monday for one of their worst weeks of the year.

Thursday's declines were stimulated by a report from the U.S. Energy Information Administration showing a build in domestic crude oil inventories, a sign demand was not yet taking on additional supplies despite continued weakness in the energy market.

A report from the International Monetary Fund tried to explain why lower crude oil prices aren't leading to a widespread rebound for the global economy. The IMF said slow demand is only part of the story, with increased supply adding to the negative pressure on crude oil prices, notably from the increase in output from Iran.

"In addition, the U.S. supply of shale oil initially proved surprisingly resilient in the face of lower prices," it said.

In the broader U.S. economic view, the Labor Department reported the less-volatile four-week moving average for initial claims was revised up 250 to 295,750, though the previous week's figures were revised lower.

Emirati oil minister to attend April oil production meeting
Dubai, United Arab Emirates (UPI) Mar 24, 2016 –

The energy minister from the United Arab Emirates said Thursday his country would participate in an April meeting in Doha to consider oil production levels.

Russia and members of the Organization of Petroleum Exporting Countries proposed a meeting in Doha to consider freezing oil production at January levels in an effort to stabilize the market for crude oil. Oil prices rallied last week after Qatari Oil Minister Mohammed al-Sada extended an invitation to Kuwait's oil minister.

Slumping crude oil prices, which on Thursday dipped back below $40 per barrel after a short-term rally, have left energy companies and oil-exporting economies with less available cash. Earlier this week, Emirati oil rig construction company Lamprell said it was holding up well against the market downturn, but expects full-year 2016 revenue to show a decline.

For the Emirati economy itself, Christine Lagarde, the managing director of the International Monetary Fund, said in late February the government deserves credit for taking some steps to address the consequences of lower oil prices.

"At the same time, I highlighted the importance of pursuing gradual fiscal consolidation by raising non-oil revenues," she said.

An oil market official with the International Energy Agency raised doubts about the prospects for production meeting in April. The monthly oil market report, released March 11 by the IEA, said a freeze on production will not have an immediate impact on the global oil market.