The price of oil was poised for a third week of decrease after a report showed unemployment in the US in June rose to the highest in almost 26 years, Bloomberg reported.
Crude oil for August 2009 delivery fell as much as $0.63, or 0.9%, to $66.10 a barrel on the New York Mercantile Exchange, and was traded at $66.35 at 10.28am in Singapore. On 2 July 2009 oil prices dropped $2.58 to $66.73. Futures were down 4.1% this week.
On 2 July oil dropped more than $2 a barrel after the US Labor Department said that the employers cut 467,000 jobs in June 2009, a signal that US fuel demand will be slow to rebound.
Crude also dropped as equities fell and the dollar increased against the euro, limiting futures purchases as an alternative investment.
June 2009 employment fell more than forecast following a 322,000 drop in May. Payrolls were estimated to decrease 365,000 after a 345,000 fall initially reported for May, based on the median of 79 economists surveyed by Bloomberg News.
The jobless rate increased to 9.5% from 9.4%. US fuel supplies rose last week by more than analysts forecast.
The Standard & Poor’s 500 Index tumbled 2.9% to 896.42, extending its drop since 12 June to 5.3% and erasing its 2009 gain. The Dow Jones Industrial Average dropped the most since 20 April.
Declining crude oil and gasoline prices helped send the Reuters/Jefferies CRB Index of 19 raw materials lower. The index fell 1.8% to 246.60.
A rising dollar makes raw materials such as oil and gold less attractive to investors. The dollar climbed to $1.3952 a euro as of 8.25am in Tokyo from $1.4003 in New York yesterday, after earlier rising to $1.3929, the highest level since 25 June.
Brent crude oil for August 2009 settlement dropped as much as $0.79, or 1.2%, to $65.86 a barrel on London’s ICE Futures Europe exchange. It was traded at $66.15 a barrel at 10.26am Singapore time. Yesterday the contract plunged 3.1% to settle at $66.65 a barrel.