Crude oil fell, heading for the biggest weekly loss in a month, as the US jobless rate climbed to the highest level this year, increasing concern that a slower economic recovery will curb oil demand.
Oil dropped as much as 2.3 per cent after the US Labour Department said payrolls increased by 54,000 in May, the fewest in eight months. The median forecast in a Bloomberg News survey called for a 165,000 increase. The unemployment rate climbed to 9.1 per cent from 9 per cent a month earlier.
"The economy is slowing down, so oil demand is going to slow down, and that's going to be your main concern," said Carl Larry, director of energy derivatives and research at Blue Ocean Brokerage LLC in New York. "You may find a little bit of support around the $97 area."
Crude oil for July delivery fell 94 cents, or 0.9 per cent, to $99.46 a barrel at 10am on the New York Mercantile Exchange after declining to $98.12, the lowest intraday price since May 24. Oil dropped 1.1 per cent last week, the biggest loss since the five days ended May 6.
Brent crude for July delivery decreased 91 cents, or 0.8 per cent, to $114.63 a barrel on the London-based ICE Futures Europe exchange.
The European benchmark contract traded at a premium of $15.17 a barrel to US. futures, up 3 cents from Thursday.
The difference between front-month contracts in London and New York reached a record $19.54 on February 21.
The spread averaged 76 cents last year. Oil may fall through June 10, 16 of 34 analysts surveyed by Bloomberg News said.
Economic growth slipped to a 1.8 per cent annual pace in the first three months of the year from 3.1 per cent in the prior quarter, revised figures from the Commerce Department showed last week.
Crude oil inventories rose 2.88 million barrels to 373.8 million in the week ended May 27, the highest level since May 2009, the Energy Department said.
Supplies of gasoline increased for a fourth week, climbing by 2.55 million barrels to 212.3 million, the department said.
Gasoline futures fell 1.79 cents, or 0.6 per cent, to $2.9498 a gallon on the Nymex.
From / Gulf News