Oil pared a decline after government data showed the U.S. added 114,000 jobs last month as the unemployment rate in the U.S. unexpectedly fell to 7.8 percent.
Futures gave up as much as $1.22 a barrel in losses after the Labor Department figures showed the nation’s jobless rate dropped to the lowest level since President Barack Obama took office in January 2009. Prices are headed for a third weekly decrease on signals that supply is exceeding demand.
“There is some positive sentiment in the employment data which is providing some support,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The fundamentals of the oil market point to ample supplies, especially here in the U.S., and anemic demand.”
Crude oil for November delivery fell 80 cents, or 0.9 percent, to $90.91 a barrel at 9:24 a.m. on the New York Mercantile Exchange. Futures slipped as much as 1.3 percent before the release of the employment data at 8:30 a.m. in Washington. Prices are down 1.4 percent this week, and are set to cap the longest run of weekly declines since June.
Brent oil for November settlement slipped 11 cents to $112.47 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $21.56 to New York-traded West Texas Intermediate, up from $20.87 yesterday.
The U.S. economy added workers last month after a revised 142,000 gain in August that was more than initially estimated, Labor Department figures showed today in Washington. The median estimate of 92 economists surveyed by Bloomberg called for an advance of 115,000. The jobless rate dropped from 8.1 percent and hourly earnings climbed more than forecast.
U.S. crude oil output rose to 6.52 million barrels a day last week, the most since December 1996, an Energy Department report on Oct. 3 showed.
“The U.S. supply picture explains why WTI continues to decline more than Brent and the spread has widened to $21,” McGillian said.
Oil in New York may slide next week as U.S. production rises, a Bloomberg survey showed. Twenty-one of 38 analysts, or 55 percent, forecast prices will drop through Oct. 12. Thirteen respondents, or 34 percent, predicted it will gain and four saw little change
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