MW: Oil near four-year low as demand outlook darkens
U.S. jobs data send futures down to $42 region; worst week in nearly six years
NEW YORK (MarketWatch) -- Crude-oil futures fell Friday for a sixth straight session to their lowest level in nearly four years, as worse-than-expected U.S. jobs data darkened outlook for energy demand.
U.S. nonfarm payrolls plunged by 533,000 in November, the worst job loss in 34 years and much bigger than the projected loss of 350,000, the Labor Department reported.
Crude is set to lose more than 20% in the week, the largest drop since March 2003.
Crude January delivery was last down $1.89, or 4.3%, at $41.78 a barrel on the New York Mercantile Exchange. The contract tumbled as much as 3% to $41.56 earlier, the lowest since January 2005.
"The fall in employment was brutal and today will be another down day for crude oil," said James Williams, an energy economist at research firm WTRG Economics. "Folks without jobs drive less, and those in fear of losing their jobs are minimizing expenditures."
The Labor Department also reported the unemployment rate rose to 6.7% in November, the highest jobless rate since October 1993.
Total U.S. petroleum products supplied in the past four weeks dropped 6.6% from the same period a year ago, the Energy Information Administration reported Wednesday. Motor gasoline demand in the world's biggest oil consuming country dropped 2.8%.
Global oil demand will show an "outright contraction" of 0.5% next year, according to Merrill Lynch analysts, led by Francisco Blanch. They expected crude prices to average at $50 next year.
"Given the rate at which we are selling off, we shudder to think where crude oil prices will be when the boys from OPEC get together in 12 days' time," said MF Global analyst Edward Meir.
The Organization of the Petroleum Exporting Countries, which controls about 40% of the world's oil production, chose not to reduce production at its meeting in Cairo last weekend. However, the oil cartel will meet next on Dec. 17 in Oran, Algeria, where production cuts may be announced
Also on the Nymex, January reformulated gasoline fell 1.4%, to 95.52 cents a gallon, and January heating oil fell 0.5%to $1.5014 a gallon.
January natural gas futures tumbled 3.1%, to $5.83 per million British thermal units.
