MW: Oil futures sell off as data shows steep job losses
NEW YORK (MarketWatch) -- Oil futures fell sharply on Thursday after data showed the U.S. economy continued to shed jobs at a rapid pace in June, rekindling concerns over when a recovery may begin to take hold.
Light sweet crude for August delivery dropped $1.93, or 3%, to $67.34 a barrel in electronic trading on Globex.
Earlier, the contract hit an intraday low of $67.23 a barrel.
The Labor Department said Thursday that nonfarm payrolls shrank by 467,000 in June higher than the 325,000 decline expected by economists surveyed by MarketWatch and the 322,000 jobs lost in May.
"It is definitely the big elephant in the room," said Phil Flynn, vice president at PFG BEST Research, commenting on the jobs data. "It's confirming what we saw earlier in the week with the dropping consumer confidence. [It's] another sign that the optimism of an economic recovery was a bit ahead of itself."
The unemployment rate ticked higher to 9.5% in June from 9.4% in the previous month, the government also reported. Read more.
"The disappointing jobs numbers raise concern about the strength and timing of a recovery," said James L. Williams of WTRG Economics in emailed comments.
"This reinforces the outlook for weak petroleum demand and should put downward pressure crude prices," he said. "On the fundamentals level, high levels of inventories, low demand and sufficient supply continue to point to lower prices."
Oil futures fell 2.2% Wednesday on the New York Mercantile Exchange.
The declines were attributed to data showing U.S. petroleum-product inventories rose for the 14th straight week, while inventories of crude oil fell, although declines were less than some reports had suggested.
Also on Globex, August reformulated gasoline fell 5 cents to $1.81 a gallon and August heating oil dropped 4 cents to $1.72 a gallon.
August natural gas futures fell 8 cents to $3.72 per million British thermal units.
The Energy Information Administration will report data on natural gas supplies on Thursday. IHS Global Insight is projecting a storage build of 82 billion cubic feet for the week ended June 26.
