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UPDATE 7-Oil falls below $99, concern grows over U.S. economy
Fri, 6th Jul 2012 15:21
By Peg Mackey
LONDON, July 6 (Reuters) - Oil fell below $99 a barrel on Friday as concern
U.S. employers hired at a disappointing rate in June, upping the pressure on the Federal Reserve to take more action to boost
the economy of the world's biggest oil consumer.
'People were looking for something better, some indicator that may show we're crawling out of this trough,' said Nigel Gault, Chief U.S. economist at IHS Global Insight. 'But everything here says we're still in it.'
Brent dropped $1.95 to $98.75 by 1347 GMT, while U.S. crude was down $2.46 at $84.76.
Monetary easing by central banks in China, the euro zone and Britain on Thursday had already underscored concerns over the fragility of the global economy that has muddied the demand outlook for commodities.
'The latest jobs data also underscores the weakness that has emerged in the global economy,' said Gene McGillian of Tradition Energy, Stamford, Connecticut.
'With the economies of China and Europe also weakening, this spells lower global demand for energy.'
Adding to the bearish tone, the head of the International Monetary Fund voiced concern over the deterioration of the world economy, saying the IMF will downgrade some of its forecasts.
OSLO INTERVENES
Norway's government will wade into a dispute between offshore oil workers and employers over pensions - calling a meeting for 1600 GMT on Friday - to force an end to a strike that has oil markets on edge.
The strike, which began on June 24, has already slowed crude exports and cut Norway's oil production by around 13 percent and its gas output by around 4 percent. Norway's oil industry upped the ante on Thursday, calling for a lockout on July 9.
'This affects all Norwegian off-shore oil production ... However, it also increases the likelihood of the Norwegian government intervening to end the strike,' said Commerzbank.
'It is not therefore surprising that the price increase has not been sustained.'
(Additional reporting by Ramya Venugopal, Luke Pachymuthu and Jessica Jaganathan in Singapore; editing by Keiron Henderson) Keywords: MARKETS OIL/
(peg.mackey@thomsonreuters.com)(+44 0207 542 7714)
COPYRIGHT
Copyright Thomson Reuters 2012. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
LONDON, July 6 (Reuters) - Oil fell below $99 a barrel on Friday as concern
spread over the health of the U.S. economy and investors expected the Norwegian government to end an oil workers' strike.
U.S. employers hired at a disappointing rate in June, upping the pressure on the Federal Reserve to take more action to boost
the economy of the world's biggest oil consumer.
'People were looking for something better, some indicator that may show we're crawling out of this trough,' said Nigel Gault, Chief U.S. economist at IHS Global Insight. 'But everything here says we're still in it.'
Brent dropped $1.95 to $98.75 by 1347 GMT, while U.S. crude was down $2.46 at $84.76.
Monetary easing by central banks in China, the euro zone and Britain on Thursday had already underscored concerns over the fragility of the global economy that has muddied the demand outlook for commodities.
'The latest jobs data also underscores the weakness that has emerged in the global economy,' said Gene McGillian of Tradition Energy, Stamford, Connecticut.
'With the economies of China and Europe also weakening, this spells lower global demand for energy.'
Adding to the bearish tone, the head of the International Monetary Fund voiced concern over the deterioration of the world economy, saying the IMF will downgrade some of its forecasts.
OSLO INTERVENES
Norway's government will wade into a dispute between offshore oil workers and employers over pensions - calling a meeting for 1600 GMT on Friday - to force an end to a strike that has oil markets on edge.
The strike, which began on June 24, has already slowed crude exports and cut Norway's oil production by around 13 percent and its gas output by around 4 percent. Norway's oil industry upped the ante on Thursday, calling for a lockout on July 9.
'This affects all Norwegian off-shore oil production ... However, it also increases the likelihood of the Norwegian government intervening to end the strike,' said Commerzbank.
'It is not therefore surprising that the price increase has not been sustained.'
(Additional reporting by Ramya Venugopal, Luke Pachymuthu and Jessica Jaganathan in Singapore; editing by Keiron Henderson) Keywords: MARKETS OIL/
(peg.mackey@thomsonreuters.com)(+44 0207 542 7714)
COPYRIGHT
Copyright Thomson Reuters 2012. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
