London: Oil prices fell for a third day on Friday, to below $76 a barrel, under pressure from huge levels of inventories and nervousness ahead of the latest batch of employment data from the world’s top energy consumer.
US crude futures fell 87 cents to $75.59 a barrel by 4:05pm. Brent crude dipped 59 cents to $77.77.
Most other commodities as well as equity markets dipped as investors nervously awaited the US jobs data due at 7:00pm.
White House spokesman Robert Gibbs said on Thursday a recent private sector payroll report signalled November unemployment level may tick up from October’s 10.2%.
“We always look at the data closely to see global economic situation and the US,” said Olivier Jakob at Petromatrix.
“Unemployment is not good for oil consumption. You need to have people go to work, drive cars and spend money at shopping malls.”
The US economy has come out of recession but unemployment is lagging and has yet to turn.
A Reuters poll suggests about 130,000 jobs were lost in November compared with 190,000 in October.
Jakob also pointed out that high oil inventory levels in the United States, especially at the delivery point of US crude at Cushing, Oklahoma, have been putting pressure on oil prices.
Supply overhang has also been a global issue this year due to a sharp fall in oil demand mainly in developed countries.
Tanks on land are brimming and oils that could not be stored on land have been aboard in ships floating at sea.
Oversupply and the fragile state of global economy will be among the key issues for the Organisation of the Petroleum Exporting Countries (Opec).
Opec's secretary general Abdullah al-Badri told Reuters on Thursday the group should be cautious when it meets on 22 December to decide its oil output policy as it needs to balance signs of economic recovery and abundant supplies.
He said oil inventories remain above their five-year average and there were 165 million barrels of crude and products floating at sea, equal to almost two days’ global demand and more than some estimates.