LONDON—Crude-oil futures fell ahead of U.S. unemployment data for August, seen as an indicator of whether the world's largest oil consumer is heading back into recession.
But a storm in the U.S. Gulf is preventing prices from falling too far. Several of the largest oil and gas producers have halted production from their platforms; around 5.7% of U.S. Gulf crude output and 2.4% of gas production has been shut in due to the storm. Delays to North Sea crude cargoes and outages in Nigeria are also supporting oil prices.
Ahead of the New York day, the front-month October contract on the New York Mercantile Exchange was down 72 cents, or 0.8%, at $88.21 per barrel. The front-month October Brent contract on London's ICE futures exchange was down 65 cents, or 0.6%, at $113.64 a barrel.
The U.S. jobs report is due at 8:30 a.m. ET. Economists surveyed by MarketWatch expect that the U.S. economy added just 53,000 jobs in August, less than half the number added in July. The unemployment rate is expected to hold steady at 9.1%. Data Thursday showed fewer jobless claims in the U.S. last week and unexpected growth in the U.S. manufacturing sector last month.
Although there is still debate over whether the U.S. economy will avoid recession, oil bulls seem to be unshakable in their confidence, analysts said.
"It's a case of good data is bullish, and bad data increases the chances of QE3 action and so is also bullish," PVM said in a note, referring to a potential third round of quantitative easing in the U.S. that would weaken the dollar and ultimately strengthen oil prices.
Either way, trade is expected to thin out after the release of the nonfarm payrolls ahead of the Labor Day holiday weekend in the U.S. Monday's holiday marks the end of the country's summer driving season.
