World oil prices recoil before US payrolls data

2nd September 2011, Comments 0 comments

Oil prices slid on Friday ahead of the release of a key US economic report, as traders were watching for signs on the health of the world's biggest oil consumer, but losses were limited by storm concerns.

Brent North Sea crude for delivery in October dropped 52 cents to $113.77 in midday deals.

New York's main contract, West Texas Intermediate (WTI) for October shed 76 cents to $88.17 a barrel.

Traders are jittery before the release of US nonfarm payrolls data later Friday, at 1230 GMT, and ahead of a three-day holiday weekend in the United States.

The numbers will indicate whether the labour market in the world's biggest economy is showing any signs of improvement.

"Market participants are still waiting for the US August non-farm payrolls report later today to provide guidance on future monetary policy steps by the Fed," said VTB Capital oil analyst Andrey Kryuchenkov.

Crude futures also rose this week after US Federal Reserve chief Ben Bernanke suggested last Friday that the bank would kick off a fresh round of monetary easing in the near future to help the flagging economy.

Analysts said investors were also monitoring a storm gathering in the Gulf of Mexico that threatens to disrupt oil supply in the southern United States.

Energy majors including BP, ExxonMobil and Royal Dutch Shell have started evacuating workers from their rigs in the Gulf of Mexico ahead of a storm that forecasters say has a 70 percent chance of becoming a tropical storm.

"Oil prices rose strongly during the week, reversing part of their August drop," said Credit Agricole CIB analyst Christophe Barret.

"The increase in crude prices was triggered by the expectation of further monetary stimulus in the US and worries regarding the possible impact of tropical storms in the US Gulf Coast."


© 2011 AFP

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