WTI, Brent set for drops

West Texas Intermediate (NYMEX:CLV14) and Brent (NYMEX:SCV14) crudes are poised for weekly declines after weaker-than-estimated U.S. jobs growth in August and as Ukraine agreed on a cease-fire with pro-Russian separatists.

U.S. employers added the fewest number of jobs this year in August, Labor Department data showed today. Ukraine agreed on a truce after more than five months of deadly fighting.

“The bias right now is bearish,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said by phone. “There are a lot of blinking lights out there that caution one to be bearish. I would be reluctant to be a big buyer right now.”

WTI for October delivery was 3 cents higher at $94.48 a barrel at 9:24 a.m. on the New York Mercantile Exchange. Prices are down 1.6 percent this week and 4.2 percent this year.

Brent for October settlement dropped 7 cents to $101.76 a barrel on the London-based ICE Futures Europe exchange. The contract is down 1.4 percent this week. The European benchmark crude traded at a $7.29 premium to WTI, compared with $7.38 at yesterday’s close.

The 142,000 advance in payrolls was weaker than the lowest estimate in a Bloomberg survey and followed a revised 212,000 gain in July, figures from the Labor Department showed. The median estimate was for a 230,000 increase.

Market Skepticism

“There’s a lot of skepticism about today’s numbers and the market may shrug it off,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone. “The weekly jobs numbers, the ISM and a slew of other positive data has pointed to robust U.S. economic growth. There’s a sense that these numbers may be revised higher.”

Jobless claims rose by 4,000 to 302,000 last week, Labor Department data showed yesterday. The total number of people on benefit rolls fell to the lowest level in more than seven years.

U.S. service providers such as retailers and construction firms expanded in August at the fastest pace in nine years, pointing to greater momentum in the economy. The Institute for Supply Management’s non-manufacturing index climbed to 59.6, the highest since August 2005, from 58.7 a month earlier, the Tempe, Arizona-based group said yesterday.

WTI may extend losses next week amid ample U.S. supply, a separate Bloomberg survey shows. Thirteen of 30 analysts, or 43 percent, predict prices will decline through Sept. 12, while 30 percent of respondents forecast an increase.

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