Crude Oil Extends Drop After Report Shows Less U.S. Job Growth Than Was Forecast

Crude oil dropped for a second day on concern the government debt crisis in Europe will widen and after the U.S. added fewer jobs than forecast last month, slowing a recovery in fuel demand.
Prices posted their biggest two day decline in a month as the euro dropped against the dollar on speculation Europe’s sovereign debt crisis will spread into the financial system. Oil fell 4.2 percent on June 4 after the Labor Department said that payrolls rose by 431,000 in May. Economists projected a 536,000 gain, according to the median forecast in a Bloomberg News survey.

“The U.S. payroll data was on the weak side of expectations and put a question mark next to the rate of U.S. economic recovery,” David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney, said by telephone today. “Concerns about Europe haven’t gone away. There are stories starting to emerge about Hungary’s fiscal position and that is affecting market sentiment.”

Crude oil for July delivery fell as much as $2, or 2.8 percent, to $69.51 a barrel in electronic trading on the New York Mercantile Exchange, and was at $70.04 a barrel at 10:22 a.m. Singapore time. The contract has fallen 6.1 percent since closing at $74.61 a barrel on June 3, the biggest two day decline since May 6.

The U.S. government hired 411,000 temporary workers for the 2010 census, accounting for the bulk of the gain in employment. Private payrolls rose a less than forecast 41,000. The growth in jobs in the private sector followed an increase of 218,000 in April that was revised from 231,000.....Read the entire article.

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