Oil falls below $73 after US jobs data
Oil slid below $73 a barrel on Friday, losing more than $2 after U.S. employment data fell short of expectations, raising doubts over the strength of economic recovery in the world's largest energy consumer.world Updated: Jun 04, 2010 19:32 IST
Oil slid below $73 a barrel on Friday, losing more than $2 after U.S. employment data fell short of expectations, raising doubts over the strength of economic recovery in the world's largest energy consumer.
US non-farm payrolls rose 431,000 in May, less than analysts expected, while the growth was buoyed by government hiring for the decennial census. Private employment, a barometer of labour market strength, slowed sharply.
"We were expecting bigger growth in private employment and the figure looks relatively weak," said Christophe Barret, oil analyst at Credit Agricole.
"We are going through a period of relatively slow growth in the U.S. and that explains why oil prices have fallen."
U.S. crude for July was down $2.10 cents to $72.52 a barrel by 1306 GMT, down from an earlier high for the day of $75.42. ICE Brent was down $1.71 to $73.70.
U.S. crude jumped 2.4 percent in the previous session to close at $74.61, the highest settlement for a front-month contract since May 12, supported by statistics showing crude inventories fell last week by more than forecast.
European shares fell sharply after the release of the jobs data, while U.S. stock market futures extended losses and the dollar rose as fears of a slower-than-expected economy recovery dampened risk appetite.
Fears about tougher funding conditions in Europe and the impact of tighter fiscal policy on growth has also been keeping a heavy lid on buying of riskier assets.
Speaking on Friday ahead of talks between the world's top 20 developed and emerging economies, leading policymakers expressed concerns about the health of the global economy, fuelling uncertainty over future energy demand.
The start of the Atlantic hurricane season this week was being carefully monitored after the top U.S. government weather agency said it could be the most intense since 2005.
That year, hurricanes Katrina and Rita severely disrupted U.S. oil production, refining and consumption by crashing through Gulf of Mexico energy facilities.
BP was making promising strides in its latest bid to capture some of the oil spewing from its ruptured deep-sea well in the Gulf of Mexico, while President Barack Obama called off an overseas trip and prepared for another visit on Friday to the spill-stricken U.S. Gulf Coast.