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UPDATE 9-Oil settles lower a third day on jobs slump
August 6, 2010 / 8:48 PM / 7 years ago

UPDATE 9-Oil settles lower a third day on jobs slump

   * Oil settles lower, but higher week on week
 * U.S. nonfarm payrolls fall, weigh on equities, oil
 * Dollar weakens, helps limit oil losses
 * Coming up: ConfBoard employment trends Mon 10 a.m. EDT
 (Recasts, updates prices, market activity to settlement)
 By Selam Gebrekidan
 NEW YORK, Aug 6 (Reuters) - Crude oil prices fell a third
straight day on Friday, weighed down by a weak U.S. jobs report
that also pulled Wall Street lower.
 But the dollar's .DXY broad slump and weakness against
the euro EUR= tempered oil's losses, and prices managed to
settle above $80 a barrel, a higher finish versus a week ago.
 U.S. crude for September CLc1 delivery fell $1.31 or 1.6
percent to settle at $80.70 a barrel, having traded from $80.04
to $82.67.
 Prices, which settled on Tuesday at a three-month high
above $82, finished the week up $1.75, or 2.21 percent from
last Friday's $78.95 settlement. Crude hit as high as $82.97 a
barrel on Wednesday -- the highest since May 4 -- before ending
that session lower following a government report showed a sharp
rise in gasoline and distillate stocks last week.
 On Friday, front-month ICE Brent crude LCOc1 fell $1.45
to settle at $80.16 a barrel.
 U.S. nonfarm payrolls fell 131,000 in July, declining for
the second straight month, the Labor Department said on Friday.
Employers did add 71,000 private sector jobs, but that was less
than the expected gain of 90,000.
 The total job losses exceeded the 65,000 drop analysts had
expected and the report's weakness added to concerns about   
the outlook for energy demand and the economy. [ID:nN05598486]
 The unemployment rate was pegged at 9.5 percent, steady
with June and lower than the 9.6 percent analysts expected.
Hiring in June was much weaker than previously thought, the
report said.
 "The oil market's response to the jobs data appeared
appropriate from our view and support within the $80-81 area
has thus far held. However, the ability to remain north of $80
could be challenged next week amid what we see as some further
slippage in the equities," said Jim Ritterbusch at Ritterbusch
and associates in Galena, Illinois.
 The dollar approached a 15-year low against the yen and a
three-month low against the euro after the jobs data came out
on Friday. [USD/]
 U.S stocks fell after the nonfarm payroll report, with
consumer stocks among the biggest losers. [ID:nN06207729]
 "Crude oil prices have been following the stock market for
months now. Stocks got hammered by the jobless data today and
oil prices were tracking right along," said Mark Waggoner,
president of Excel Futures Inc in Bend, Oregon.
 Waggoner said he was watching the market to see if prices
dropped below $79.60 a barrel, which he thought could send them
back in last week's $72 to $79 a barrel trading range.
 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
 Graphic on oil's returning correlation with currencies:
 link.reuters.com/hab43n
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 Industry sources kept watching developments in the Middle
East including Israel's border clash with Lebanon and Iran's
dispute with the West over Tehran's nuclear program.
 Concern about being too short at the weekend with turmoil
simmering in the Middle East could support oil prices, sources
said.
 Adding more uncertainty to the market, the UAE said on
Friday that militants attacked the Japanese supertanker that
was damaged in a partial explosion in the Strait of Hormuz on
July 28. [ID:nLDE6750Q1]
 (Additional reporting by Robert Gibbons in New York, Alex
Lawler in Cape Town, and Alejandro Barbajosa in Singapore;
Editing by David Gregorio)


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