Friday, August 6, 2010

Crude Oil Falls for Third Day as U.S. Job Losses Spur Concern Over Demand Growth

Crude oil fell the most in a month as weaker-than-forecast growth in U.S. company payrolls bolstered concern that the economic rebound in the world’s biggest oil consuming country is slowing. Oil slipped as much as 2.2 percent after the Labor Department said private payrolls that exclude government agencies rose by 71,000, less than forecast, after a gain of 31,000 in June that was smaller than previously reported. A government report on Aug. 4 showed that U.S. fuel supplies rose last week as demand fell.

“The fundamental news today is that the U.S. economy isn’t creating enough jobs,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “There’s no indication that this situation will change anytime soon. There were already doubts about demand, and inventories remain elevated.” Crude oil for September delivery fell $1.15, or 1.4 percent, to $80.86 a barrel at 12:45 p.m. on the New York Mercantile Exchange. Prices are heading for the biggest decline since July 1. Futures are up 2.4 percent this week.

Brent crude oil for September settlement declined $1.31, or 1.6 percent, to $80.30 a barrel on the London based ICE Futures Europe exchange. Economists projected a 90,000 rise in private jobs, according to the median estimate in a Bloomberg News survey. Overall employment fell 131,000 and the jobless rate held at 9.5 percent, according to the department. “We’re losing jobs, not adding them,” said Michael Fitzpatrick, vice president of energy at MF Global in New York. “This is hardly a signal that energy demand will be vibrant in coming months”.....Read the entire article.

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