OIL FUTURES: Nymex Crude Drops Below $98/Bbl
May 04 2012 - 11:30AM
Dow Jones News
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;
ben.lefebvre@dowjones.com.