BLBG: Oil Falls to Lowest Since February Before U.S. Jobs Data
Oil fell below $100 a barrel for the first time since February as U.S. employers added fewer workers than forecast, bolstering concern that the economy of the world’s largest crude-consuming country may be losing speed.
Futures declined as much as 2.6 percent after Labor Department figures showed payrolls climbed 115,000, the smallest gain in six months. The median estimate of 85 economists surveyed by Bloomberg called for a 160,000 advance. Elections in France, Greece, Italy and Germany this weekend may determine how the regions governments respond to Europe’s financial crisis.
“The oil market remains focused on the economy,” said David Greely, head of energy research at Goldman Sachs Group Inc. in New York. “The economic news from Europe and the U.S. has been a little disappointing. It looks like the U.S. is growing a little slower than we expected.”
Crude oil for June delivery dropped $2.37, or 2.3 percent, to $100.17 a barrel at 9:38 a.m. on the New York Mercantile Exchange. The contract touched $99.90, the lowest level since Feb. 13. Prices are down 4.5 percent this week.
Brent oil for June settlement fell $2.01, or 1.7 percent, to $114.07 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to New York futures widened to $13.90 from $13.54 yesterday.
Oil in New York climbed to a five-week high of $106.43 on May 1 after a report showed that U.S. manufacturing increased at the fastest pace in 10 months.
Volatility Returns
“Volatility has returned to the market,” Greely said. “We’re going to remain in a choppy range through the second quarter and then move higher in the second half of the year as the U.S. and Chinese economies improve.”
Oil may extend losses next week as economic growth and fuel consumption slows, according to a Bloomberg News survey. Prices will decline through May 11, according to 18 of 33 analysts and traders surveyed by Bloomberg News. Eleven respondents, or 33 percent, predicted futures will rise and four estimated there will be little change. Last week, 43 percent of survey respondents forecast a decrease.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net
