BUSINESS

Oil below US$100 for first time since February amid global econlomic concerns

05/04/2012 10:35 EDT | Updated 07/04/2012 05:12 EDT
NEW YORK, N.Y. - Oil dropped below US$100 a barrel for the first time since February on Friday following a disappointing U.S. jobs report and warnings of a weakening world economy.

Benchmark West Texas Intermediate crude fell as low as $99.90 Friday before edging back to $100.21 a barrel in New York. Still, crude prices were down 2.3 per cent on the day.

Brent crude, used to set the price of oil imported into the United States, lost $1.98 to US$114.10 a barrel.

Oil prices have been falling since Wednesday as analysts and traders increasingly focus on the economy.

The U.S. Labour Department said Friday that the American economy added just 115,000 jobs in April — far fewer than the pace of hiring earlier this year.

Meanwhile, government data shows that U.S. oil consumption dropped 5.3 per cent in the first quarter, and supplies have been growing for the last six weeks, hitting a 22-year high in Cushing, Okla., where benchmark crude is delivered.

The European economy also is slowing down as eurozone governments continue to struggle with a mountain of debt.

"We're fearful that the economy is slowing more than we originally thought," PFGBest analyst Phil Flynn said.

Oil has crossed the $100 mark 21 times in the last year, between a high of US$113.93 and a low of US$75.67 on Oct. 4.

As demand falls in the West, OPEC has been delivering more oil to world markets in an effort to force prices even lower. And western countries are planning talks with Iran over its nuclear program, easing fears of a protracted standoff in the Middle East.

In other futures trading, heating oil lost 5.12 cents to US$3.0357 a U.S. gallon (3.79 litres), wholesale gasoline lost 4.55 cents to US $3.0045 a gallon, while natural gas dropped 4.6 cents to US$2.294 per 1,000 cubic feet.

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