West Texas Intermediate crude fell after data showing employers in the U.S., the world’s largest oil consumer, added the fewest jobs this year in August. Brent dropped in London amid reports that a cease-fire would start today in Ukraine.
Futures declined 0.4 percent in New York. Ukraine’s government and eastern rebels agreed in Minsk, Belarus, to start a cease-fire, Interfax reported. Figures from the Labor Department showed an advance in payrolls of 142,000, which was weaker than the lowest estimate in a Bloomberg survey.
“It’s disappointing because it’s much below expectations,” Olivier Jakob, managing director of Switzerland-based researcher Petromatrix, said in an e-mail. The payrolls figures contrast other recent data signaling economic recovery in the U.S., he said.
WTI for October delivery was at $94.12 a barrel in electronic trading on the New York Mercantile Exchange, down 33 cents, at 1:54 p.m. London time. The contract fell 1.1 percent to $94.45 yesterday. The volume of all futures traded was about 20 percent below the 100-day average for the time of day. Prices have dropped 4.3 percent this year.
Brent for October settlement was 45 cents lower at $101.38 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $7.24 to WTI on ICE, compared with $7.38 yesterday.
The climb in U.S. payrolls follows a revised 212,000 gain in July, Labor Department data showed. The median Bloomberg survey estimate was for a 230,000 increase. The unemployment rate fell to 6.1 percent from 6.2 percent in July, reflecting a drop in joblessness among teenagers.
Separate economic data from the U.S. signaled that the nation’s economy is recovering, which would spur oil consumption, Myrto Sokou, an analyst at Sucden Financial Ltd. in London, said by e-mail.
“Oil demand from the U.S. seems to remain fairly robust following the recent strong U.S. ISM non-manufacturing and employment data,” she said.
U.S. service providers such as retailers and construction firms expanded in August at the fastest pace in nine years, pointing to greater momentum in the economy. The Institute for Supply Management’s non-manufacturing index climbed to 59.6, the highest since August 2005, from 58.7 a month earlier, the Tempe, Arizona-based group said yesterday.
Jobless claims rose by 4,000 to 302,000 in the week ended Aug. 30, according to a Labor Department report yesterday. The total number of people on benefit rolls fell to the lowest level in more than seven years.
“We have to look to see if this cease-fire is valid, we’ll have to see whether Russian troops are withdrawing from where they are, whether there are buffer zones, and other things,” she said.
WTI may extend losses next week amid ample U.S. supply, a separate Bloomberg survey shows. Thirteen of 30 analysts, or 43 percent, predict prices will decline through Sept. 12, while 30 percent of respondents forecast an increase.
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