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Oil settles below US$75 after jobs report
Source: Agencies |
September 4, 2010, Saturday
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OIL prices retreated yesterday after a closely watched US employment report threw cold water over future energy demand from the world's largest economy.
Benchmark crude for October delivery fell 42 cents to settle at US$74.60 a barrel on the New York Mercantile Exchange.
Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates, attributed the decline to the ongoing concerns about a glut of supply and sluggish demand from a weak economy.
The US jobs report showed not enough jobs were created to absorb the growing number of Americans looking for work.
The government said yesterday the jobless rate rose in August to 9.6 percent from 9.5 percent in July.
Meanwhile, oil inventories hit the highest combined levels in 27 years, according to Cameron Hanover energy consulting agency.
"If you look at the next five years, there's no reason to believe that gasoline will ever be in short supply like it was prone to be from, let's say, 2003 to 2007," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.
While an improving economy with more jobs would be good news, it also could mean higher gas prices with more commuters driving to work. Most experts believe oil will have to range between US$80 and US$100 a barrel before US motorists will see a US$3-per-gallon national average. The national average for a gallon of unleaded regular was US$2.681 yesterday, according to AAA, Wright Express and Oil Price Information Service.
Several analysts say that likely won't occur until next spring, just ahead of the summer driving season, barring a hurricane that interferes with Gulf of Mexico production.
"You really need to see a turnaround in housing prices and a turnaround in jobs to justify higher, sustained (oil) prices above US$80 right now," oil trader Stephen Schork said.
Oil prices have traded between US$70 and US$80 for most of the past year as the global economy recovered from last year's recession, but developed countries struggled to regain strong growth. US crude and fuel inventories have remained high, suggesting the demand for fuel remains sluggish.
In other October contracts, heating oil fell 0.5 cent to settle at US$2.0573 a gallon, gasoline slipped 0.21 cent to US$1.9195 a gallon and natural gas added 18.8 cents to US$3.939 per 1,000 cubic feet.
In London, Brent crude lost 26 cents to settle at US$76.67 a barrel on the ICE Futures exchange.
Benchmark crude for October delivery fell 42 cents to settle at US$74.60 a barrel on the New York Mercantile Exchange.
Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates, attributed the decline to the ongoing concerns about a glut of supply and sluggish demand from a weak economy.
The US jobs report showed not enough jobs were created to absorb the growing number of Americans looking for work.
The government said yesterday the jobless rate rose in August to 9.6 percent from 9.5 percent in July.
Meanwhile, oil inventories hit the highest combined levels in 27 years, according to Cameron Hanover energy consulting agency.
"If you look at the next five years, there's no reason to believe that gasoline will ever be in short supply like it was prone to be from, let's say, 2003 to 2007," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.
While an improving economy with more jobs would be good news, it also could mean higher gas prices with more commuters driving to work. Most experts believe oil will have to range between US$80 and US$100 a barrel before US motorists will see a US$3-per-gallon national average. The national average for a gallon of unleaded regular was US$2.681 yesterday, according to AAA, Wright Express and Oil Price Information Service.
Several analysts say that likely won't occur until next spring, just ahead of the summer driving season, barring a hurricane that interferes with Gulf of Mexico production.
"You really need to see a turnaround in housing prices and a turnaround in jobs to justify higher, sustained (oil) prices above US$80 right now," oil trader Stephen Schork said.
Oil prices have traded between US$70 and US$80 for most of the past year as the global economy recovered from last year's recession, but developed countries struggled to regain strong growth. US crude and fuel inventories have remained high, suggesting the demand for fuel remains sluggish.
In other October contracts, heating oil fell 0.5 cent to settle at US$2.0573 a gallon, gasoline slipped 0.21 cent to US$1.9195 a gallon and natural gas added 18.8 cents to US$3.939 per 1,000 cubic feet.
In London, Brent crude lost 26 cents to settle at US$76.67 a barrel on the ICE Futures exchange.
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