Crude Oil Falls to Eight Month Low on Unemployment Rates

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Crude fell to the lowest level in almost eight months as worsening employment rates in the U.S. and the euro area signaled fuel demand may tumble. Oil dropped as much as 4.6 percent after the Labor Department said American employers added the smallest number of workers in a year in May. The jobless rate in the 17 countries that use the euro reached the highest level on record, the European Union’s statistics office in Luxembourg reported.

“You need a word stronger than terrible for the jobs report,” said Stephen Schork, president of the Schork Group Inc. in Villanova, Pennsylvania. “Everything is driven by the lousy economic data.” Crude futures for July delivery declined $2.33, or 2.7 percent, to $84.20 a barrel at 9:39 a.m. on the New York Mercantile Exchange after falling to $82.56, the lowest intraday level since Oct. 7. Prices are down 23 percent from this year’s settlement high of $109.77 on Feb. 24.

Brent for July settlement tumbled $2.15, or 2.1 percent, to $99.72 a barrel on the ICE Futures Europe exchange in London, falling below $100 for the first time since October.

U.S. payrolls climbed by 69,000, less than the most pessimistic estimate in a Bloomberg survey in which responses ranged from increases of 75,000 to 195,000. The jobless rate rose to 8.2 percent from 8.1 percent. It was forecast to hold at 8.1 percent.

Unemployment has exceeded 8 percent since February 2009, the longest such stretch since monthly records began in 1948.....Read the entire Bloomberg article.


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Bloomberg:Crude Oil Trades Near Two Year High, RSI Signals Reversal

Crude oil traded near its highest level in two years in New York as the dollar headed for a weekly decline against most major counterparts after the Federal Reserve’s decision to purchase more debt to boost the U.S. economy.

Crude’s 6.6 percent rally this week, driven by the dollar’s decline, may be about to end, according to a technical indicator used by traders. The U.S. currency has fallen versus all but one of its 16 most traded peers since the Fed said Nov. 3 it will buy about $75 billion of Treasuries every month through June.

“Underlying demand in the industrialized world is still not enough to justify these price levels,” said Eugen Weinberg, head of commodity research at Commerzbank AG. “But market sentiment is so strong that if the weakness of the dollar persists I couldn’t rule out higher prices.”

Oil for December delivery traded at $86.83 a barrel, up 34 cents, in electronic trading on the New York Mercantile Exchange at 12:51 p.m. London time. The contract earlier rose to $87.22, the highest price since Oct. 9, 2008. Brent crude for December settlement rose 16 cents to $88.16 after advancing to $88.80 a barrel on the ICE Futures Europe exchange in London.

Futures advanced after a U.S. government report showed payrolls rose more than forecast in October. Payrolls climbed 151,000, exceeding the median estimate of economists surveyed by Bloomberg News and following a revised 41,000 drop the prior month that was smaller than initially estimated, Labor Department figures showed today in Washington. The jobless rate held at 9.6 percent, in line with forecasts. Crude oil's relative strength index......Read the entire article.


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