Oil falls below $41 as downbeat data weigh

Oil falls below $41 as downbeat data weigh
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First Published: Fri, Feb 06 2009. 09 27 AM IST
Updated: Fri, Feb 06 2009. 09 27 AM IST
Singapore: Oil fell below $41 a barrel on Friday, reversing some of the previous day’s gains as the focus turned from a stock market rally to bleak economic news.
US non-farm payrolls numbers due later today are likely to add to the gloom, after data the previous day showed applications for US jobless benefits soared to a 26-year high and German manufacturing suffered its biggest decline since 1990.
US light crude for March delivery fell 43 cents to $40.74 a barrel at 7:25am, while London Brent crude, which usually trades below its US counterpart, fell 15 cents to $46.31 a barrel.
Oil has shed more than $100 from its July peak near $150 a barrel as the global financial crisis triggered recessions in all of the big industrialised economies and sharp slowdowns elsewhere, cutting demand.
Inventories in the world’s top consumer, the United States, have swelled.
“The relationship between NYMEX and Brent is still being distorted by the inventory situation in the United States,” said David Moore, commodity strategist at Commonwealth Bank of Australia.
“Tonight’s (payrolls) data may affect the perception of the US economy and may give the market new direction,” he added.
US non-farm payrolls, due out later in the session, are estimated to have shed more than half a million jobs in January after losing a similar number in December.
Signals from producer group the Organization of the Petroleum Exporting Countries (Opec) that it may cut output further to help bolster the market have supported prices this week.
The cartel may cut more oil output at a meeting next month, and one Opec source said a reduction of 1 million barrels per day may be discussed.
US Democrats in the Senate on Thursday pushed towards passage of a huge economic stimulus package despite scant Republican support, hoping to boost the US economy, which could help stem a decline in fuel demand.
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First Published: Fri, Feb 06 2009. 09 27 AM IST
More Topics: Markets | Oil | Crude | US | Jobs |