HOUSTON—Crude-oil futures in New York dipped below $83 a barrel following lower-than-expected U.S. job numbers.
Light, sweet crude futures slipped as low as $82.56 a barrel in early morning trading after nonfarm U.S. payroll data. But futures later pared losses to $83.24 a barrel, down 3.8%.
Traders braced for a bearish day. "We're going to really get whacked here," said Addison Armstrong with Tradition Energy, who said that the U.S. numbers were "hugely negative" and that U.S. crude markets were looking at the possibility of West Texas Intermediate crude below $82 a barrel. "If we get to that, it's a free fall," he said.
Brent crude, the European benchmark under that most of the global crude is traded, slid below the $100 a barrel level, trading at $98.77, down 3%. "It went off my charts. This is really bearish," said Andy Lebow, an oil analyst with Jefferies.
U.S. May payrolls grew by 69,000 last month, the smallest gain in a year, and the unemployment rate grew one-tenth of a percentage point to 8.2%, the first increase in nearly a year. Economists surveyed by Dow Jones Newswires had forecast a gain of 155,000 in payrolls and for the jobless rate to remain at 8.1% in May.
While crude-oil markets could still come under massive liquidation, they could also see some recovery if "equity markets can stage some kind of comeback during the day," Mr. Lebow said. Crude oil has been trading in close relation to equity markets in what has been a tough week for both.
