BLBG: Oil in New York Fluctuates Between Gains and Losses After Jobs Increase
Crude oil fluctuated between gains and losses in New York as U.S. employers added more jobs than forecast in July, a signal that fuel demand may increase.
Futures gained as much as 2 percent as the Labor Department reported that payrolls rose by 117,000 workers, more than the 85,000 median estimate in a Bloomberg News survey of economists. Oil also touched an eight-month low of $82.87 a barrel. The Standard & Poor’s 500 Index advanced as much as 1.5 percent after the worst drop since February 2009 yesterday.
“There’s extreme volatility and people are trying to come up with a reason behind every $2 move,” said Jim Ritterbusch, president of Ritterbusch & Associates, a Galena, Illinois-based consulting company.
Oil for September delivery fell 29 cents, or 0.3 percent, to $86.34 a barrel at 10:54 a.m. on the New York Mercantile Exchange. Earlier, futures rose to $88.32. Prices have tumbled 9.8 percent this week, the most since the week ended May 6.
Brent crude for September settlement on the London-based ICE Futures Europe exchange increased $1.10, or 1 percent, to $108.35 a barrel. The European benchmark contract was at a $22.01 a barrel premium to U.S. futures after reaching a record $22.67 on Aug. 2.
The U.S. jobless rate slipped to 9.1 percent from 9.2 percent in June, according to the Labor Department.
The S&P 500 fell 0.6 percent to 1,193.17, and the Dow Jones Industrial Average dropped 0.4 percent, to 11,334.49.
The dollar also weakened, supporting commodities priced in the U.S. currency. The Dollar Index, which tracks the currency against six major counterparts, fell 0.4 percent to 74.825.
After Sell-Off
“The bullish jobless numbers should bolster both stocks and commodities, especially oil,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “After this big sell-off, people are probably going to be wary about going short any further, and some people will see this as a buying opportunity.”
An Iranian pipeline exploded today in Larstan in the west of the country, state-run Mehr news service said, boosting the price of Brent. The fire was extinguished 10 hours after it began, according to state-run Press TV said. Iran is the second- biggest producer in the Organization of Petroleum Exporting Countries.
U.S. gasoline demand, averaged over four weeks, slipped 23,000 barrels, or 0.3 percent, to 9.07 million barrels a day in the week ended July 29, its fourth consecutive decline and the lowest level in more than two months, the Energy Department reported Aug. 3.
“Concerns about demand destruction are really moving things, and people don’t think the jobs numbers are strong enough to overcome all those concerns,” said Phil Flynn, vice president of research at PFGBest in Chicago.
To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net.
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.
