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Oil prices tumble as Europe and the US shed jobs
Source: Agencies |
July 3, 2009, Friday
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Online Edition
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OIL prices tumbled to their lowest level in a month yesterday following the release of woeful job numbers in Europe and the U.S.
Benchmark crude for August delivery fell US$2.58, nearly 4 percent, to settle at US$66.73 a barrel on the New York Mercantile Exchange.
Crude hit an eight-month high in midday trading Tuesday, but prices have fallen at the close for five straight days now.
Nymex is closed today for the July Fourth holiday.
A Labor Department report yesterday showed the economy lost a larger-than-expected 467,000 jobs in June. The unemployment rate climbed to 9.5 percent from 9.4 percent in May, underscoring concerns about the pace of economic recovery.
Since the recession began in December 2007, the economy has lost a net total of 6.5 million jobs.
That has destroyed demand for energy on numerous levels. Employees who have lost jobs or are in fear of losing jobs are driving less and buying fewer goods, many of them petroleum based. Factories also have curbed production and are using less natural gas and electricity.
U.S. stores of natural gas continue to grow as energy demand has weakened. The government reported that the nation's surplus grew more than expected last week, and it's now 21 percent above the five-year average.
The job numbers in the U.S. came on the heels of an awful employment picture in Europe.
Unemployment in the 16 countries that use the euro spiked to a ten-year high in May. The seasonally adjusted unemployment rate for the euro zone in May stood at 9.5 percent.
After rising 41 percent in the second quarter, which ended Tuesdsay, energy prices are now showing signs of a retreat.
Oil prices have doubled since March, when the Fed committed US$1.2 trillion dollars to prop up the banking industry. Investors poured money into commodities like oil as a hedge against inflation, and foreign traders found they had more buying power as the dollar weakened.
How long the weak dollar can support energy prices, if demand is still weak, remains to be seen.
In other Nymex trading, gasoline for August delivery fell 6.82 cents to settle at US$1.7908 a gallon and heating oil lost 6.41 cents to settle at US$1.7016 a gallon. Natural gas for August delivery dropped 18 cents to settle at US$3.615 per 1,000 cubic feet.
In London, Brent prices dropped US$2.14 to settle at US$66.66 a barrel on the ICE Futures exchange.
Benchmark crude for August delivery fell US$2.58, nearly 4 percent, to settle at US$66.73 a barrel on the New York Mercantile Exchange.
Crude hit an eight-month high in midday trading Tuesday, but prices have fallen at the close for five straight days now.
Nymex is closed today for the July Fourth holiday.
A Labor Department report yesterday showed the economy lost a larger-than-expected 467,000 jobs in June. The unemployment rate climbed to 9.5 percent from 9.4 percent in May, underscoring concerns about the pace of economic recovery.
Since the recession began in December 2007, the economy has lost a net total of 6.5 million jobs.
That has destroyed demand for energy on numerous levels. Employees who have lost jobs or are in fear of losing jobs are driving less and buying fewer goods, many of them petroleum based. Factories also have curbed production and are using less natural gas and electricity.
U.S. stores of natural gas continue to grow as energy demand has weakened. The government reported that the nation's surplus grew more than expected last week, and it's now 21 percent above the five-year average.
The job numbers in the U.S. came on the heels of an awful employment picture in Europe.
Unemployment in the 16 countries that use the euro spiked to a ten-year high in May. The seasonally adjusted unemployment rate for the euro zone in May stood at 9.5 percent.
After rising 41 percent in the second quarter, which ended Tuesdsay, energy prices are now showing signs of a retreat.
Oil prices have doubled since March, when the Fed committed US$1.2 trillion dollars to prop up the banking industry. Investors poured money into commodities like oil as a hedge against inflation, and foreign traders found they had more buying power as the dollar weakened.
How long the weak dollar can support energy prices, if demand is still weak, remains to be seen.
In other Nymex trading, gasoline for August delivery fell 6.82 cents to settle at US$1.7908 a gallon and heating oil lost 6.41 cents to settle at US$1.7016 a gallon. Natural gas for August delivery dropped 18 cents to settle at US$3.615 per 1,000 cubic feet.
In London, Brent prices dropped US$2.14 to settle at US$66.66 a barrel on the ICE Futures exchange.
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