LONDON: Brent crude oil fell further below $102 a barrel yesterday, heading for a third weekly drop in four as a strong dollar depressed demand and US employment data suggested the world’s biggest oil consumer was growing more slowly than expected.
Oil prices on both sides of the Atlantic fell nearly $1 on Thursday as a cut in interest rates by the European Central Bank led to a spike in the US dollar, making it more expensive for holders of other currencies to buy the dollar-denominated commodity.
US jobs figures yesterday showed non-farm payrolls increased by just 142,000 last month, well below forecasts of 225,000 and the smallest rise eight months.
Brent was down 15 cents at $101.68 a barrel by 1320 GMT, after closing 94 cents down on Thursday. US crude was five cents lower at $94.40 a barrel, having lost $1.09 the previous day.
Both benchmarks were on track to end the week with a loss of more than one percent.
“The main factor driving us down has been the strength of the dollar,” said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt.
“Supply is plentiful, but it has been for some time. The change this week has been the rise of the US currency. We would need to see a weaker dollar and signs of improving demand for oil prices to rise much on a sustainable basis.”
Dominick Chirichella, at News York’s Energy Management Institute, said the US jobs data was also negative. “I view the oil complex as overall bearish right now,” Chirichella said.
US crude oil stocks fell by 905,000 barrels last week, while gasoline stocks dropped by 2.3 million barrels, Energy Information Administration data showed. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 385,000 barrels.
REUTERS
