By Sara Sjølin, MarketWatch
NEW YORK (MarketWatch) — Crude-oil futures retreated Friday as energy traders reacted to disappointing jobs data suggesting a longer-lasting downturn for the U.S. economy.
Benchmark Nymex crude for August delivery CL1Q -1.92% lately dropped 1.7%, shedding $1.60 to stand at $96.91 a barrel after nonfarm payrolls rose by only 18,000, well below the 125,000 increase expected by economists in a survey by MarketWatch.
Oil had traded as high as $98.80 before the lackluster June employment data — the nation’s jobless rate ticked up to 9.2% from 9.1% in May — were released. Read more on employment data for June.
“We got the idea that we were on the road to recovery, but the report changed that in seconds,” said James Cordier, portfolio manager with Optionsellers.com in Florida.
On Thursday, the ADP private-sector jobs report, used as an early gauge for nonfarm payrolls, showed a June increase of 157,000. Further, initial jobless claims dropped 14,000 to a seasonally adjusted 418,000 in the week ended July 2.
Oil settled at $98.67 a barrel, the highest price since the International Energy Agency said it would release 60 million barrels of oil from strategic reserves last month.
“The last couple of days, the rally was extended because we thought the economy was getting better,” Cordier said.
Also Thursday, the U.S. government said crude inventories declined 900.000 barrels for the week ended July 1. The consensus of estimates in a survey of analysts by Platts had been for a decline in stockpiles of 2.5 million barrels.
The dollar index DXY +0.12% , which measures the greenback against six rival currencies, rose 0.2% to 75.04.
Sara Sjølin is a MarketWatch reporter, based in New York.
