Singapore: Oil was steady under $44 on Friday, after sinking 4% overnight as signs that the financial crisis is deepening stoked fears that energy demand would shrink further.
The next major signal on the US economy will come from February US non-farm payrolls and unemployment data due later on Friday, which are expected to reinforce the grim outlook for the world’s top energy consumer.
US crude was up 4 cents at $43.65 a barrel by 7:55am, and is down 2.3% so far this week, while London Brent crude gained 1 cent to $43.65 a barrel.
David Moore, commodity strategist with the Commonwealth Bank of Australia, said the market was likely to tread water ahead of the jobs data, with a Reuters poll flagging a rise in unemployment to a 25-year high.
“A poor result is pretty much factored into market expectations, and we expect a soft bias for oil prices both tonight and the early part of next week,” Moore said.
Economic news on Thursday reinforced the grim picture.
Workers filing new claims for jobless benefits remained consistent with a severe recession, new orders received by US factories fell for a sixth straight month in January and a report showed a record one in eight US mortgages behind on payments or in foreclosure.
Asian stocks slid on Friday, after a warning from General Motors’ that it may need to file for bankruptcy drove Wall Street shares to 12-year lows, highlighting the severe troubles of major US companies and banks.
But most Asian equity markets held up better than their US and European counterparts, thanks in part to lingering hopes that China would boost its planned $585 billion in stimulus spending.
China’s Premier Wen Jiabao said on Thursday the No. 2 oil consumer would achieve 8% growth this year - a level considered necessary to maintain employment growth - despite the deepening global recession. But he stopped short of announcing fresh economic stimulus as some investors had hoped.
Oil prices have traded in a narrow band around $40 since mid-December, pressured by slumping demand from the global economic downturn, but drawing support from expectations Opec might cut production again when it meets on 15 March.