Crude oil dropped after a report showed the US jobless rate at a 25-year high, adding to concern fuel demand will slide further.
Oil fell as much as 3.1 percent after the US Labor Department said the economy lost more than 650,000 jobs for a fourth consecutive month. Total daily fuel demand averaged over the past four weeks reached the lowest since October, the US Energy Department said on Wednesday.
“If the turnaround in the economy isn’t going to happen as soon as people had hoped, then oil remains under pressure, and we’ll start testing the lows from the beginning of the year, back below US$35,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut.
Crude oil for May delivery fell US$0.13, or 0.3 percent, to settle at US$52.51 a barrel at 2:49pm on the New York Mercantile Exchange. Oil has risen US$0.13 this week, for a seventh consecutive gain. That’s the longest stretch of increases since July 2007. Prices are up 18 percent this year.
Crude rose 8.8 percent on Thursday, driven by the G20 plan to foster global economic recovery. It touched US$32.70 in intraday trading on Jan. 20.
Total daily fuel demand was 18.9 million barrels in the four weeks ended March 27, down 4.4 percent from a year earlier, according to the US Energy Department.
Lower demand by refiners is prompting some sellers to reduce prices.
Saudi Arabia may lower prices for crude oil sold to Asia for the first time in four months as processing profits declined, refinery officials said. Saudi Arabian Oil Co, the world’s largest oil producer, may cut its Arab Heavy and Arab Medium oil grades, according to a survey of refiners in Taiwan, Singapore, Japan and China. Saudi Aramco, as the company is also known, is expected to provide prices next week.
Brent crude oil for May settlement climbed US$0.72, or 1.4 percent, to US$53.47 a barrel on London’s ICE Futures Europe exchange.
The Brent contract had risen 10 percent in the past two days and is now US$0.96 a barrel more expensive than May crude traded on the NYMEX, the most since Feb. 24.