Gasoline futures slid as U.S. employers added fewer jobs than projected in June, increasing concerns that the country’s economic recovery is stalling and fuel demand won’t improve.
Prices fell for the first time in three days as Labor Department figures showed June payrolls climbed 80,000 after a 77,000 increase in May. Economists projected a 100,000 gain, according to the median estimate in a Bloomberg News survey. Private employers, which excludes government agencies, added 84,000 workers in June, the fewest in 10 months.
“This is a terrible number,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “There’s nothing good about it. It’s the type of number that would suggest the U.S. economy is slipping back into recession.”
August-delivery gasoline declined 4.88 cents, or 1.8 percent, to settle at $2.716 a gallon on the New York Mercantile Exchange. Futures slipped 0.4 percent this week, and are up 1.1 percent this year. The contract is for reformulated gasoline, or RBOB, delivered into New York Harbor.
Prices fell as low as $2.7115 after the dollar touched a two-year high against the euro, reducing the investment appeal of commodities.
“The market is nervous about the euro making new lows and that may be spooking some investors,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York.
The unemployment rate held at 8.2 percent. Joblessness has exceeded 8 percent since February 2009, the longest such stretch since monthly records began in 1948. The so-called underemployment rate -- which includes part-time workers who’d prefer a full-time position and people who want work but have given up looking -- increased to 14.9 percent from 14.8 percent.
“The employment figures show growth in the U.S. is going to continue to be at a very slow pace, and that would dampen enthusiasm for oil demand,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Gasoline this week swung between a low of $2.57 on July 2 and a high of $2.795 yesterday. The high occurred after Brent crude gained when Norway’s largest oil producer said a strike forced a production halt and the Energy Department reported that gasoline demand climbed 1.8 percent last week.
The low followed reports from the U.S., China and Europe that signaled a slowing global economy. The Institute for Supply Management’s factory index for the U.S. slid to 49.7 in June from 53.5 in May, the first contraction since July 2009. Chinese manufacturing indexes dropped to seven-month lows and euro-area unemployment reached a record in May.
The International Monetary Fund will reduce its estimate for global growth this year on weakness in investment, jobs and manufacturing in Europe, the U.S., Brazil, India and China, Managing Director Christine Lagarde said.
“The market is just in a big trading range,” Lebow said. “There are a lot of crosscurrents and every other report has led to a confirmation of the lower-growth scenario.”
August gasoline strengthened versus the September contract and versus crude oil in New York as Energy Department data released yesterday showed that East Coast stockpiles of gasoline fell to a seven-month low in the week ended June 29. Supplies are the lowest for this time of year since at least 1990, based on weekly data.
The premium of August over September futures jumped to 11.34 cents a gallon from 10.96 cents yesterday. The fuel’s premium to WTI crude, or the crack spread, based on August contracts, widened 72 cents to $29.62 a barrel on the Nymex.
“This is reflective of very tight inventories of RBOB in the Northeast,” Lipow said.
Heating oil for August delivery fell 5.85 cents, or 2.1 percent, to $2.7099 a gallon. Prices advanced 0.5 percent this week and are down 7.7 percent in 2012.
Regular gasoline at the pump, averaged nationwide, increased 2 cents to $3.358 a gallon yesterday, according to AAA. That’s the fourth consecutive increase. Prices are down 15 percent from a year-to-date high of $3.936 on April 4 and are 5.9 percent below a year ago.