Bloomberg News

Oil Falls, Trimming Weekly Gain, as U.S. Jobs Data Disappoints

July 08, 2011

July 8 (Bloomberg) -- Oil plunged in New York after data showed U.S. employers added fewer jobs than forecast in June, stoking concern that fuel demand will be curtailed in the world’s largest consumer of crude.

Futures fell as much as 2.1 percent. U.S. employers added 18,000 workers in June, the fewest in nine months, data from the Labor Department in Washington showed. The unemployment rate unexpectedly climbed to 9.2 percent, the highest level this year. Crude supplies fell 0.3 percent to 358.6 million barrels last week, the Energy Department said yesterday, remaining above their five-year average of 345 million.

“The U.S. data surprised to the downside massively,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “Lower payrolls, higher unemployment rate and no wage growth do not bode well for commodities, so we expect a further slide ahead.”

Crude for August delivery on the New York Mercantile Exchange fell as much as $2.09 to $96.58 and was at $96.93 at 1:40 p.m. London time. The contract climbed yesterday to $98.67, the highest since June 14. The price has risen 2.1 percent this week. Brent oil for August settlement fell 91 cents, or 0.8 percent, to $117.68 a barrel on the London-based ICE Futures Europe exchange. The contract surged 4.4 percent yesterday.

--With assistance from Yee Kai Pin in Singapore and Ben Sharples in Melbourne. Editors: John Buckley, Raj Rajendran

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net


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