Oil above $100 as traders eye weak US jobs market
Oil prices inched above $100 a barrel Friday in Asia, consolidating after a sharp drop in the previous session amid investor concern a weak US jobs market may undermine crude demand.business Updated: May 06, 2011 11:55 IST
Oil prices inched above $100 a barrel Friday in Asia, consolidating after a sharp drop in the previous session amid investor concern a weak US jobs market may undermine crude demand.
Benchmark crude for June delivery was up 43 cents at $100.23 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. In London, Brent crude for June delivery was up $1.10 to $111.90 a barrel on the ICE Futures exchange.
The contract plunged $9.44 to settle at $99.80 on Thursday because of signs US economic growth is slowing. The Labor Department said that first-time claims for unemployment benefits rose to 474,000 last week, the highest level in eight months.
Investors will be closely watching the government's non-farm payroll numbers scheduled to be released later Friday. Economists forecast that employers added 185,000 workers in April and the unemployment rate is expected to remain unchanged at 8.8 percent.
Oil has retreated after gaining 35 percent from February to reach $114 last week. Other commodities that had jumped in recent months, such as gold and silver, have also seen steep declines this week.
"Downward momentum has accelerated during the past couple of days due to disappointing economic releases," Ritterbusch and Associates said in a report.
A stronger dollar, which makes oil more expensive for investors with other currencies, also helped push crude prices down.
Some analysts expect oil to resume its rise as political unrest in the Middle East and North Africa could spread and threaten to disrupt crude supplies in the oil-rich region.
"Those geopolitical risks have not disappeared," said Victor Shum, an analyst with energy consultancy Purvin & Gertz in Singapore. "I think the up trend over the long term is still in tact, and what we saw yesterday was a big bump in the road."
In other Nymex trading in June contracts, heating oil rose 3.3 cents to $2.92 a gallon and gasoline gained 3.4 cents to $3.13 a gallon. Natural gas futures were down 0.3 cent at $4.26 per 1,000 cubic feet.