By Claudia Assis and Polya Lesova, MarketWatch
SAN FRANCISCO (MarketWatch) -- Crude-oil futures on Friday fell to their lowest level in nearly a month, a lackluster end of a week that has seen oil prices losing 8% so far.
Oil held on to losses after the government reported that U.S. nonfarm payrolls declined by 125,000 in June, even as the unemployment rate unexpectedly dropped from the previous month. A steeper-than-expected decline for factory orders also did nothing to tip the price balance the other way.
Crude for August delivery fell 37 cents, or 0.5%, to $72.57 a barrel on the Comex division of the New York Mercantile Exchange. That brings weekly losses to 8%, its biggest five-day decline in nearly two months.
The likely negative end of the week would also snap oil out of its winning weekly streak, as crude has ended the previous three weeks in the black.
The contract hit an intraday low of $71.67 a barrel after the Labor Department released the jobs data. The unemployment rate dropped to 9.5% in June from 9.7% in May, the lowest level since July 2009.
Also, private-sector payrolls expanded by a modest 83,000 in June, lower than the 115,000 increase expected by economists polled by MarketWatch. Total nonfarm payrolls tumbled 125,000 in June after surging 433,000 in May.
The mixed read on unemployment was likely already expected and priced in accordingly, said Tom Bentz, an analyst at BNP Paribas in New York. Markets were "quiet" ahead of the long holiday, he added. Moreover, steeper declines are unlikely as many in the market feel oil may be oversold at this point, Bentz said.
Oil futures had posted steep losses on Thursday as various economic data rekindled worries over a slowdown in global growth and its potential impact on energy demand.
"Worse-than-expected U.S. economic data increased the concerns about an economic recovery and led to massive selling pressure on the commodity markets," said analysts at Commerzbank in a note published before the release of the jobs data.
In other energy news, Russia's oil production hit a record high in June and remained above 10 million barrels a day for the 10th month in a row, Reuters reported, citing an unnamed industry source.
This performance means Russia remains the world's top oil producer, ahead of Saudi Arabia, according to the report.
Meanwhile, some analysts say that the oil spill in the Gulf of Mexico could push oil prices higher. Read more.
