Oil falls as US job growth fails to impress

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Associated Press

Posted on October 5, 2012 at 9:01 AM

Updated Friday, Oct 5 at 12:02 PM

Oil fell more than 2 percent Friday as traders fret that jobs aren't growing fast enough in the U.S. to significantly boost demand for fuel.

Benchmark oil was down $2.38, or 2.6 percent, to $89.33 per barrel in midday trading in New York. Oil rose immediately after the government's report came out in the morning but the price slipped steadily after that.

The economy created 114,000 jobs in September, in line with what economists had expected.

"That doesn't suggest really strong job growth," Gene McGillian, broker and analyst at Tradition Energy. McGillian said the report, combined with the fact that there are ample supplies of oil and low demand, is driving down prices.

The U.S. Labor Department did say that the unemployment rate fell to 7.8 percent, the first time it's been below 8 percent in nearly four years. The number of unemployed Americans is now 12.1 million, the fewest since January 2009.

Oil jumped 4 percent on Thursday following a 4 percent decline on Wednesday. Traders have been trying to gauge the strength of global oil demand while also watching developments surrounding Syria for any signs of a disruption in supplies from the Middle East.

In London, Brent crude, which is used to price international varieties of oil, was fell $1.56 to $111.02.

Among other energy futures traded in New York:

— Natural gas retreated 2 cents to $3.39 per 1,000 cubic feet.

— Heating oil fell 5 cents to $3.14 per gallon.

— Wholesale gasoline dropped 2 cents to $2.92 per gallon.

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