U.S. oil futures have fallen below $98 a barrel in midday trading, falling more than $4 since a weaker-than-expected jobs report.
The futures have fallen as low as $97.83, a level not touched in intraday trading since Feb. 7.
Light, sweet crude for June delivery dropped below $100 a barrel in the immediate aftermath of the indicator--and have been on a steady slide since. Futures recently were down $4.34, or 4.3%, at $98.18 on the New York Mercantile Exchange. Brent crude on ICE Futures Europe fell $3.86, or 3.3%, to $112.24 a barrel.
"With the global economy continuing to show all of the signs of slowing even further, oil demand growth is going to underperform the projections for this year and likely into next year," Dominick Chirichella of the Energy Management Institute said in a report.
The drop came after the U.S. Labor Department released data showing nonfarm payrolls rose by 115,000 in April, much less than the gain of 168,000 expected by economists surveyed by Dow Jones Newswires. The unemployment rate, obtained by a separate survey of U.S. households, ticked down a tenth of percentage point to 8.1%.
Employment data in the U.S., the world's biggest oil consumer, signals how much diesel and fuel demand may change in coming months. Weak employment usually correlates with lackluster demand as fewer motorists travel to work or take vacations.
Oil prices will most likely stay above $100 for the day but could fall below that amount in the coming week, said Addison Armstrong, senior director of market research at Tradition Energy.
"We're pretty oversold at the moment," Armstrong. "There's a possibility (of going below $100), but I don't expect for that to hold today."
-By Ben Lefebvre, Dow Jones Newswires; 713-547-9201; [email protected]