By Sara Sjølin and Austen Sherman, MarketWatch NEW YORK (MarketWatch) — Crude-oil futures retreated Friday as energy traders reacted to disappointing jobs data that suggested a longer-lasting downturn for the U.S. economy. Benchmark Nymex crude for August delivery CL1Q -2.91% lately dropped 2.8%, or $2.71, to stand at $95.95 a barrel. Nonfarm payrolls rose by 18,000, well below the 125,000 increase expected by economists in a survey by MarketWatch. “We got the idea that we were on the road to recovery, but the report changed that in seconds,” said James Cordier, portfolio manager with Optionsellers.com in Florida. Oil had traded as high as $98.80 before the lackluster June employment data — the nation’s jobless rate ticked up to 9.2% from 9.1% in May — were released. Read more on employment data for June. “The past couple weeks we have been seeing a risk-on trade with a lot of money moving back in to oil,” said Jim Ritterbusch, president of oil-advisory firm Ritterbusch & Associates. “This accumulation turned in to liquidation mode with the number we saw this morning.” On Thursday, the ADP private-sector jobs report, used as an early gauge for nonfarm payrolls, showed a June increase of 157,000. Further, initial jobless claims dropped 14,000 to a seasonally adjusted 418,000 in the week ended July 2. Oil settled at $98.67 a barrel, the highest price since the International Energy Agency said it would release 60 million barrels of oil from strategic reserves last month. “The last couple of days, the rally was extended because we thought the economy was getting better,” Cordier said. Also Thursday, the U.S. government said crude-oil inventories declined 900,000 barrels for the week ended July 1. The consensus of estimates in a survey of analysts by Platts had been for a decline in stockpiles of 2.5 million barrels. Energy futures were down almost across the board. Gasoline for August delivery RB1Q -1.54% fell 1.4% and August heating oil HO1Q -0.86% shed 0.7%. Both were trading at $3.08 per gallon. Natural gas for August delivery NG11Q +1.14% bucked the losing trend; it added 1.1% to $4.18 per million British thermal unit on the Nymex, but analysts remained skeptical. “I really don’t see natural gas truly on the rise, it gave up quite a bit earlier this week and is still trading in the low $4’s,” said Beth Sewell, a managing partner at Quantum Power and Gas Services. “I think traders are closing positions ahead of the weekend more than anything.” The gain comes after a better-than-expected inventory rise of 95 billion cubic feet for the week ending July 1. Expectations had been an increase of 78 billion to 82 billion. The dollar index DXY +0.34% , which measures the greenback against six rival currencies, rose 0.2% to 75.04.

Source