MW: Oil falls as weak jobs data spurs demand concern
By Myra P. Saefong and Sarah Turner, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures fell Friday as disappointing data on U.S. employment fueled concerns about the economy and energy demand.
Nonfarm payrolls rose by a seasonally adjusted 54,000 in May, the smallest gain since September and a fraction of the 125,000 jobs expected by economists polled by MarketWatch.
The official unemployment rate increased to 9.1% in May, the Labor Department said. That’s the highest unemployment rate since December. Read more about the employment data.
Light, sweet crude-oil futures for July delivery CLN11 -0.92% fell 67 cents, or 0.6%, to $99.74 a barrel on the New York Mercantile Exchange.
So far this week, oil has lost 0.9%.
“Unemployment up to 9.1% means less driving demand as people don’t have the income — same with lower than expected nonfarm payroll of only 54,000,” said Darin Newsom, a senior analyst at Telvent DTN in Omaha.
Add the surprise increase in crude-oil supplies reported by the Energy Information Administration on Thursday and “the market looks more comfortable near $94 than $104,” he said.
Oil moderated some of its losses after a survey of senior executives showed the U.S. service sector accelerated slightly in May.
The Institute for Supply Management on Wednesday said its services index rose to 54.6% last month from 52.8% in April.
Readings over 50% indicate more firms are expanding than contracting. Economists surveyed by MarketWatch expected the services index to register 54%.
Energy analysts at MF Global said they believe energy markets will begin start to focus on a meeting of the Organization of the Petroleum Exporting Countries on Wednesday, “where mixed signals are being sent as to what the cartel will do.” Read more about what’s expected ahead of the OPEC summit.
Elsewhere in energy trading Friday, July natural gas NGN11 -0.88% was down 4 cents at $4.75 per million British thermal units.
July heating oil HON11 -0.42% fell 1 cent to $3.03 a gallon and July gasoline RBN11 -0.44% traded at $2.96 a gallon, down less than a penny.
