Oil slips from $100 peak as economic worry looms large
OIL prices fell $2 a barrel on Friday from its $100 lifetime high as gloomy US jobs data heightened concern about a slowdown in the world’s top consumer that could dampen fuel demand.
By Agencies |
LONDON: OIL prices fell $2 a barrel on Friday from its $100 lifetime high as gloomy US jobs data heightened concern about a slowdown in the world’s top consumer that could dampen fuel demand. Equities markets and the dollar also took a hit after a government report showed the US unemployment rate rose to 5% in December — its highest in more than two years.
US crude oil dropped $2.01 from the previous day’s close to $97.18 at the time of going to press. London Brent crude lost 82 cents to $96.78.
“The jobs data is pressuring stock markets and may be viewed as another negative sign for the economy, which in the long run will actually hurt oil demand,” said Tom Bentz of BNP Paribas. Encouraging the losses in oil prices Friday, Mexico’s government said the country’s main oil export ports had reopened after being shut for several days due to bad weather.
Friday’s losses come after oil marched to $100.09 on Thursday, the second straight day of triple digit prices, after crude stocks in top consumer the US sank to a three-year low.
Oil’s surge has darkened the economic outlook in the US, already battered by a housing crisis, and has threatened economic growth in Europe. Some analysts said Opec’s reluctance to increase crude supplies despite oil’s break above $100, combined with geopolitical tensions, would keep oil at record levels.
The Organisation of the Petroleum Exporting Countries agreed at its last meeting in December to keep output unchanged. Officials from the group say exporters can do little to tame oil prices and that world markets are well-supplied.
The oil cartel in December 2007 pumped beyond the rate targeted in a pact to boost output, led by a rebound in supply from the United Arab Emirates, a Reuters survey showed Friday.
Major consuming nations have no intention of releasing strategic fuel stocks to curb a rally entering its sixth year. The International Energy Agency (IEA), adviser to industrialised countries, echoed the White House in saying there was no need to release emergency crude.
US crude oil dropped $2.01 from the previous day’s close to $97.18 at the time of going to press. London Brent crude lost 82 cents to $96.78.
“The jobs data is pressuring stock markets and may be viewed as another negative sign for the economy, which in the long run will actually hurt oil demand,” said Tom Bentz of BNP Paribas. Encouraging the losses in oil prices Friday, Mexico’s government said the country’s main oil export ports had reopened after being shut for several days due to bad weather.
Friday’s losses come after oil marched to $100.09 on Thursday, the second straight day of triple digit prices, after crude stocks in top consumer the US sank to a three-year low.
Oil’s surge has darkened the economic outlook in the US, already battered by a housing crisis, and has threatened economic growth in Europe. Some analysts said Opec’s reluctance to increase crude supplies despite oil’s break above $100, combined with geopolitical tensions, would keep oil at record levels.
The Organisation of the Petroleum Exporting Countries agreed at its last meeting in December to keep output unchanged. Officials from the group say exporters can do little to tame oil prices and that world markets are well-supplied.
ADVERTISEMENT
The oil cartel in December 2007 pumped beyond the rate targeted in a pact to boost output, led by a rebound in supply from the United Arab Emirates, a Reuters survey showed Friday.
Major consuming nations have no intention of releasing strategic fuel stocks to curb a rally entering its sixth year. The International Energy Agency (IEA), adviser to industrialised countries, echoed the White House in saying there was no need to release emergency crude.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
