Reuters/New York
Oil futures fell yesterday as US jobs data came in below expectations, tempering economic optimism that had pushed Brent crude to its highest level in four months earlier in the session, and prompting some profit-taking.
The disappointing number led many oil investors to sell out of positions after sharp gains in the previous two days.
“We’ve got a pullback from the jobs data, but I suspect we are also seeing some profit-taking before the weekend,” said Bob Yawger, director of energy futures at Mizuho Securities in New York.
“That said, we are still trading at historically high levels. I wouldn’t be surprised if we tested $110, although that won’t happen today.”
US crude oil futures had fallen 96 cents to $106.85 a barrel by 1655 GMT. Despite the decline, the US benchmark was still heading for a gain of around 2% this week.
Brent futures fell 65¢ to $108.89 a barrel after reaching an intra-day peak for the day of $110.09 — the highest since April 3. Brent is still on track for a weekly increase of 1.7% after two weeks of losses.
The North Sea benchmark maintained its premium to West Texas Intermediate, which widened to around $2.06 a barrel.
Gasoline futures fell with the rest of the energy complex, dropping 4 cents to trade near $2.99 a gallon.
Strong US manufacturing data for July, better European factory numbers and healthier-than-expected Chinese industrial data led to sharp gains over the previous two sessions.
Concern over supply disruptions in Iraq, Libya and Nigeria prevented heavier losses.
Libya’s oil exports continued to flow at less than half normal rates yesterday as strikes and protests shut major oil terminals in the North African Opec producer, triggering one of the worst disruptions in the past year.
These outages helped trim Opec output to a four-month low in July, a Reuters survey published on Wednesday showed. Opec output averaged 30.25mn bpd, down from 30.38mn bpd in June, the survey found.
Opec supply looks set to tighten further. Seaborne oil exports from the producer group, excluding Angola and Ecuador, will fall by 490,000 bpd in the four weeks to August 17, an analyst who estimates future shipments said on Thursday.
Iraq’s production has come under pressure as Sunni insurgents target its northern pipeline, while technical problems curb output in the south.
Nigerian production has been blighted by oil theft, a factor that severely dented Royal Dutch Shell and Eni’s second-quarter results.
Geopolitical risks were in focus after Israeli Prime Minister Benjamin Netanyahu said Iranian president-elect Hassan Rouhani had shown his true face after he was quoted by Iran’s student news agency ISNA as saying Israel was a “wound” that must be removed.
Iranian state media said unidentified news agencies had distorted Rouhani’s remarks.
State-owned Press TV broadcast footage that showed Rouhani saying a “wound” had been inflicted on the Muslim world by the Israeli occupation of Palestinian land, but made no reference to the “Zionist regime” or the removal of Israel.
Traders work on the floor of the US oil futures market. Oil prices fell yesterday.
