(MENAFN- The Peninsula) US oil futures fell by more than $1 yesterday as US jobs data came in below expectations, tempering economic optimism that pushed oil to its highest level in four months earlier in the session and prompting some profit-taking.
US employers slowed their pace of hiring in July, with the number of jobs outside the farming sector increasing by 162,000, the Labour Department said, below the median forecast of 184,000 in a Reuters poll.
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 fell $1.10 to $106.77 a barrel by 11:54am EDT (1554 GMT). Despite the decline, the US benchmark was still heading for a gain of around 2 percent this week. Brent futures fell 64 cents to $108.90 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 percent after two weeks of losses.
The North Sea benchmark maintained its premium to West Texas Intermediate, which widened to around $2.09 a barrel. Petrol 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 Opecc 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 30.25m barrels per day (b/d), down from 30.38m b/d 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 b/d 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.
Meanwhile, US proved oil reserves grew by a record amount in 2011, according to a government report, in the latest indicator of the North American energy boom. The US added 3.8 billion barrels of crude in 2011, a 15 percent increase, according to the US Energy Information Administration.
Proved oil reserves stood at 29bn barrels in 2011, the highest volume since 1985. "Horizontal drilling and hydraulic fracturing in shale and other tight rock formations continued to increase oil and natural gas reserves," said EIA Administrator Adam Sieminski.
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