Crude Oil falls on gloomy US job data

Published: Saturday, September 3, 2011, 13:26 [IST]

Crude oil futures fell on MCX after posting a weekly gain, as no job creation in August by US adds to the fears that US economy is heading towards another recession which will kill consumption.

The US Labor Department reported that no new jobs have been created in August, quite below the overall expectations of 65,000 by various analysts.

At the Multi Commodity Exchange, crude for delivery in September opened at Rs 3,980 per bbl and touched an intraday low of Rs 3,965 per bbl. It was trading between Rs 3,975 – Rs 3,977 per bbl around 1:11 pm IST.

Similarly, crude for delivery in far-month February opened at Rs 4,140 per bbl and was trading in the range of Rs 4,134 – Rs 4,141 per bbl same time.

In NewYork, Benchmark crude fell $2.48, or 2.8 per cent, to finish at $86.45 on the New York Mercantile Exchange after the Labor Department said no jobs were added in August.

US is the world's biggest consumer of crude and employment growth is very much vital to the economy as people with jobs have more spending power.

Data released by the US Labour Department on Friday showed that nonfarm payroll employment in the country was unchanged in August 2011 over the previous month. The unemployment rate remained at 9.1 per cent.

Friday's crude losses wiped out 4.1% gain in the week through Thursday, when it had settled at a one-month high, due to a tropical storm threat in the US Gulf of Mexico.

Oil companies including Exxon Mobil and BP shut in 666,321 barrels of crude production in the U.S. Gulf of Mexico on Friday.

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Story first published: Saturday, September 3, 2011, 13:26 [IST]