NEW YORK (AP) — Oil tumbled more than 2 percent Friday, giving up most of its gains for the week after the latest government data showed hiring in the U.S. is at a virtual standstill.
The Labor Department said that employers added the fewest jobs in nine months and the unemployment rate rose to 9.2 percent in June. A slowdown in hiring means that gasoline demand could remain stagnant as fewer workers join the daily commute and consumers limit driving and trips to the gas station as they watch their spending.
Benchmark West Texas Intermediate crude for August delivery gave up $2.41, or 2.4 percent, at $96.26 per barrel in midday trading on the New York Mercantile Exchange. In London, Brent crude lost 85 cents at $117.74 per barrel on the ICE Futures exchange. WTI started the week around $95 a barrel and rose as high as $99.42 during trading on Thursday.
Gasoline futures also dropped following the jobs report. The contract for August delivery gave up 4 cents at $3.0864 per gallon on the Nymex.
Gas pump prices rose again, reaching a national average $3.594 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is up 4.4 cents from a week ago. It’s still about 39 cents below the three-year high reached in early May. A year ago drivers paid 87.7 cents per gallon less, on average.
Tom Kloza, chief oil analyst for the Oil Price Information Service, is sticking with his summer gasoline forecast for a national average between $3.25 and $3.75 per gallon. He noted that oil is traded around the world, and demand is expected to expand despite sluggish jobs growth in the U.S. While the U.S. is the world’s largest petroleum consumer, demand growth will be driven by motorists, trucking companies and factories in China and India.
Sluggish U.S. gasoline demand may delay Brent crude reaching $125 per barrel next year, as forecast by Goldman Sachs. “But it’s not going to lead to any major selling” of oil contracts, Kloza said. Brent is used by many East Coast refineries to produce gasoline.
In other Nymex trading for August contracts, heating oil lost 2 cents to $3.0813 per gallon and natural gas gained 6 cents to $4.198 per 1,000 cubic feet.