Oil prices fall as US job losses mount
October 2, 2009
Oil prices fell beneath $68 (R520) here on Friday as official data revealed a jump in job losses and the unemployment rate in the United States, the world's biggest energy-consuming nation.
Brent North Sea crude for delivery in November sank $1.26 to $67.93 a barrel in afternoon London trading.
New York's main contract, light sweet crude for November delivery dropped $1.05 to $69.77 a barrel.
US job losses accelerated to 263 000 in September and the unemployment rate rose to 9.8 percent, the American government said Friday in a report that poured cold water on hopes for strong recovery from recession.
"The latest jobs report for the US makes for bleak reading," said ING economist Rob Carnell.
The unemployment rate hit a fresh 26-year high, rising one-tenth of a point, according to the Labor Department monthly snapshot.
But payroll losses were far worse than expectations for a loss of 175 000 jobs. The number of job cuts rose sharply after a revised loss of 201 000 in August.
"With a further 263 000 jobs lost in September, this is the worst month for employment losses since July, and is considerably worse than the minus 175 000 average expectation by forecasters," added Carnell.
The report doused hopes of a swift economic recovery in the recession-struck United States, which is the top global energy-consuming country followed by number two China.
Oil prices had edged higher Thursday as the market also assessed "constructive" talks between key oil producer Iran and world powers over Tehran's sensitive nuclear programme.
This week, US President Barack Obama demanded swift and "constructive" action from Iran following crucial nuclear talks, and warned that his patience for dialogue with Tehran was limited.
Obama conceded the meeting between world powers and Tehran in Geneva, which included the highest-level direct talks between the United States and Iran in three decades, was a "constructive" start to defusing a nuclear standoff.
But he warned that Washington was ready to quickly clamp "increased pressure" on Tehran, an apparent code word for sanctions, if it sought to promote endless talks on its nuclear programme simply as a delaying tactic.
Western powers suspect the programme is aimed at making atomic weapons, a charge which Iran denies.
The Islamic republic produces around 3.8 million barrels of crude oil per day and is the third biggest global oil exporter after Russia and Saudi Arabia. - AFP
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