Business

Published: Friday July 3, 2009 MYT 7:40:00 AM
Updated: Friday July 3, 2009 MYT 12:08:35 PM

Oil falls further Friday after unemployment rises in US, Europe(update)


SINGAPORE: Oil prices hovered above $66 a barrel Friday in Asia in light holiday trading volume a day after grim unemployment numbers from the U.S. and Europe sent crude prices tumbling.

Benchmark crude for August delivery slipped 26 cents to US$66.47 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange.

On Thursday, it fell $2.58, nearly 4 percent, to settle at $66.73.

Trading in the U.S. is closed Friday for the Independence Day holiday.

Oil came off an eight-month intraday high of $73.38 a barrel earlier this week on growing investor concerns that a doubling of the crude price since March isn't justified by a sluggish global economy.

Weak jobs figures released Thursday suggested consumption will remain tepid and crude demand may not pick up quickly.

A Labor Department report showed the U.S. economy lost a larger-than-expected 467,000 jobs in June.

The unemployment rate climbed to 9.5 percent, a 26-year high.

Unemployment in the 16 countries that use the euro spiked to a ten-year high in May, also at 9.5 percent.

The dismal economic data undermined investor confidence and sent the Dow Jones industrial average down 2.6 percent Thursday.

Most Asian stock indexes also opened lower Friday.

In other Nymex trading, gasoline for August delivery fell 1.3 cents to $1.78 a gallon and heating oil held at $1.70. Natural gas for August delivery rose 4.8 cents to $3.66 per 1,000 cubic feet.

In London, Brent prices slid 38 cents to $66.27 a barrel on the ICE Futures exchange. - AP

Earlier report

Oil prices tumble as US and Europe unemployment rises

NEW YORK: Oil prices tumbled to their lowest level in a month Thursday following the release of woeful job numbers in Europe and the U.S.

Benchmark crude for August delivery fell $2.58, nearly 4 percent, to settle at $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 Friday for the July Fourth holiday.

On Thursday, a Labor Department report 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 $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 $1.7908 a gallon and heating oil lost 6.41 cents to settle at $1.7016 a gallon.

Natural gas for August delivery dropped 18 cents to settle at $3.615 per 1,000 cubic feet.

In London, Brent prices dropped $2.14 to settle at $66.66 a barrel on the ICE Futures exchange. - AP


Latest NYSE, NASDAQ and other business news, from AP-Wire


For latest Bursa Malaysia indices, charts and other information click here

New York Stock Exchange:
http://www.nyse.com

Nasdaq Stock Market:
http://www.nasdaq.com


For Tokyo Stock Exchange click here

  • E-mail this story
  • Print this story