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Commodities Fall to Three-Month Low as U.S. Jobs Growth Slows

Commodities fell to the lowest level in more than three months as oil tumbled below $100 a barrel on weaker-than-expected U.S. employment data.

The Standard & Poor’s GSCI Spot Index of 24 commodities dropped 2.4 percent, led down by West Texas Intermediate, after the Labor Department in Washington said payrolls climbed by the smallest amount in six months. WTI, which fell 3.9 percent, accounts for 30.25 percent of the index, the largest share.

“The jobs data is just another negative factor and all the markets, crude, gasoline, just washed out,” said Tom Bentz, a director with BNP Paribas Prime Brokerage Inc. “There is no clear sign of a bottom.”

The GSCI index declined to 653.60, the lowest level since Jan. 20. Oil for June delivery fell $4.05 to $98.49 a barrel on the New York Mercantile Exchange, the lowest settlement level since Feb. 7.

April’s payroll growth was less than the 160,000 increase forecast by economists polled by Bloomberg. The jobless rate fell to a three-year low of 8.1 percent, and earnings stagnated. The participation rate, which indicates the share of working-age people in the labor force, fell to 63.6 percent, the lowest level since December 1981, from 63.8 percent.

Euro-region services and manufacturing output contracted more than initially estimated in April. A euro-area composite index based on a survey of purchasing managers in both industries dropped to 46.7 from 49.1 in March, London-based Markit Economics said today. That’s the steepest decline since October and below an estimate of 47.4 published on April 23.

‘Looking Oversupplied’

“Oil was already looking oversupplied before today’s jobless number,” said Phil Flynn, an analyst at futures brokerage PFGBest in Chicago. “With Europe in recession and the U.S. economy slowing, it’s getting harder to justify the long side. The same goes for all the energies.”

Crude supplies rose 2.84 million barrels to 375.9 million last week, the most since September 1990, the government said May 2. U.S. domestic output increased 8,000 barrels a day to 6.12 million, the highest level since November 1999.

Nickel and silver were the biggest gainers in the GSCI index. Nickel’s three-month rolling forward contract on the London Metal Exchange rose 1.7 percent to $17,575 a metric ton. Silver for July delivery, the most active contract, rose 1.4 percent to settle at $30.432 an ounce on the Comex.

To contact the reporter on this story: Moming Zhou in New York at mzhou29@bloomberg.net;

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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