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Oil drops in hours preceding U.S. jobs report

By early afternoon in Europe, benchmark oil for January delivery was down 24 cents to $86.02 a barrel in electronic trading on the New York Mercantile Exchange.

By PABLO GARDONI
The Associated Press

12/7/2012

The price of oil eased to near $86 a barrel Friday as investors awaited the release of the monthly U.S. jobs report, a key indicator for the world's largest economy.

By early afternoon in Europe, benchmark oil for January delivery was down 24 cents to $86.02 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.62, or 1.8 percent, to finish at $86.26 per barrel in New York.

The Labor Department will release November's job figures later in the day. Superstorm Sandy forced stores and restaurants to close along the East Coast and the affected employees will be counted as out of work. But many economists think that if the effects of the storm are put aside, the data will show the U.S. economy is picking up steam.

In the wait for the figures, market sentiment was dented after Germany's central bank cut its 2013 economic growth forecast to 0.4 percent from 1.6 percent it had predicted in June. It also lowered its forecast for 2012 to 0.7 percent from 1 percent.

"Concerns about demand have currently gained the upper hand," said a report from analysts at Commerzbank in Frankfurt. "We regard the scale of the price slide as exaggerated and expect prices to recover."

The conflicts in the Middle East, including unrest in Egypt and the threat of the use of chemical weapons in Syria, which were one of the factors supporting prices recently, seemed to draw less attention Friday.

"The eruption of violence in Egypt ... has had no impact on oil prices, though this may change when market players focus their attention more on the risks to supply again," Commerzbank said.

Brent crude, which is used to price international varieties of oil, was up 7 cents to $107.10 a barrel in London. In other energy futures trading on the New York Mercantile Exchange:

— Heating oil fell 0.19 cent to $2.9413 per gallon.

— Wholesale gasoline added 0.98 cent to $2.6067 per gallon.

— Natural gas declined 1.6 cents to $3.65 per 1,000 cubic feet.

Pamela Sampson in Bangkok and Geir Moulson in Frankfurt contributed to this report.

The Trucker staff can be reached for comment at editor@thetrucker.com.

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