US jobs data sends oil price tumbling

May 05, 2012 | 08:20

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Oil prices dropped sharply Friday after traders took disappointing US jobs data as a sign of more slow growth to come in the US economy.

World oil prices nosedived, hitting three-month lows as a disappointing US non-farm payrolls report sparked fresh concern over energy demand in the world's biggest crude consuming nation.

The US benchmark West Texas Intermediate crude for June delivery sank $4.05 dollars from Thursday's close to end at $98.49 a barrel, the lowest level since February 6.

London's main contract, Brent North Sea for June, lost $2.90 dollars a barrel to $113.18, its lowest level since February 2.

Traders pointed to the jobs data release in the morning, which showed the US economy generating only 115,000 net new positions last month, less than half the level of the first two months of the year.

The figure came in well below forecasts, and was barely at the level needed to match the normal growth of the working population, much less reduce the 12.5 million people unemployed.

The data also showed many tens of thousands of American had dropped out of the jobs market altogether -- another sign suggesting that household income and spending would continue to be weak.

"The really weak jobs data... raises concerns for the economy and for petroleum consumption," said James Williams of WTRG Economics.

With tensions over Iran appearing to lessen, and US oil stocks extremely high, Williams said oil prices had already been on edge.

"The data is triggering concerns about the overall economy, and historically, anytime the economy is weak, oil prices collapse."

AFP

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