Oil fell below $100 a barrel for the first time since February as U.S. employers added fewer workers than forecast, stoking concern that demand won’t be enough to reduce inventories from their highest level in 21 years.
Futures declined 3.9 percent after Labor Department figures showed payrolls rose 115,000, the smallest gain in six months. An advance of 160,000 was projected, according to the median of 85 economist forecasts in a Bloomberg survey. Euro-region services and manufacturing output contracted more than initially estimated in April.
“The oil market remains focused on the economy,” said David Greely, head of energy research at Goldman Sachs Group Inc. in New York. “The economic news from Europe and the U.S. has been a little disappointing. It looks like the U.S. is growing a little slower than we expected.”
Crude oil for June delivery tumbled $4.05 to $98.49 a barrel on the New York Mercantile Exchange, the lowest settlement since Feb. 7. It was the biggest one-day drop since Dec. 14 and capped a 6.1 percent decline for the week, the most since September.
Brent oil for June settlement fell $2.90, or 2.5 percent, to end the session at $113.18 a barrel on the London-based ICE Futures Europe exchange. It was the lowest close since Feb. 2. The European benchmark contract’s premium to New York futures widened to $14.69 from $13.54 yesterday.
The jobless rate fell to a three-year low of 8.1 percent. The participation rate, which indicates the share of working-age people in the labor force, slipped to 63.6 percent, the lowest level since December 1981.
“The only reason that the jobless rate went down was that the labor participation rate fell to the lowest level since 1981,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas-based energy consultant. “This is going to weigh on the crude market and especially on equities.”
A euro-area composite index based on a survey of purchasing managers in both industries dropped to 46.7 from 49.1 in March, London-based Markit Economics said today. That’s below an estimate of 47.4 published on April 23.
Elections in France, Greece, Italy and Germany this weekend may determine how the region’s governments respond to Europe’s financial crisis.
French voters go to the polls May 6 in a final runoff between President Nicolas Sarkozy and Socialist challenger Francois Hollande and Greeks will pick a new government in a national election the same day. There will be local elections in Germany and Italy.