US crude falls 2.5 percent

US crude prices fell 2.5 percent on Friday, the biggest percentage loss in two weeks, as a disappointing June jobs report dashed hopes the data would indicate a rebound for stalled economic growth. News of reduced North Sea loadings helped limit Brent losses, and pushed the premium to its US counterpart to above $22 a barrel intraday, the highest since June 15, according to Reuters data.
But US crude posted a weekly gain and Brent crude was on track to do the same, even with Friday's losses. US crude fell $2.47 to settle at $96.20 a barrel, below front-month crude's 30-day moving average of $96.84, but off its $95.60 intraday low. For the week, US crude ended up 1.33 percent, posting a second straight weekly gain. Brent futures for August fell 39 cents to $118.20 a barrel by 2:52 pm EDT (1852 GMT), off its $119.87 peak reached ahead of the US jobs report.
Even at Friday's $116.88 intraday low, Brent would post a weekly gain, after rising 6.33 percent last week. After lagging early, US crude trading volumes outpaced Brent's and both were on track to slightly surpass their 30-day averages. "Brent seems to have more speculative interest in it, along with the North Sea problems and missing African barrels, and the demand in Asia for similar barrels," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
US jobs growth ground to a near-halt in June. Nonfarm payrolls rose only 18,000, the weakest reading since September and well below economists' expectations for a rise of at least 90,000. US crude briefly extended losses to more than $3 after US President Barack Obama said the jobs report confirms there is a long way to go to get the nation's economy back on track and that the impasse over the US debt limit was contributing to the economy's weakness.
"The employment data has weighed mightily on oil prices. Employment trends are key to future demand, and this is now two months of poor data," said John Kilduff, partner at hedge fund Again Capital LLC in New York. "The only supportive feature (in the market) is further declines in North Sea loadings. These outages coupled with Libya and Nigeria issues are increasingly meaningful," he said.
Output from the North Sea Forties oil stream will slip to a two-year low in August, further reducing supply of the crude that helps to set the Brent benchmark. Thursday's government inventory report showed US crude and refined product stocks fell last week. Oil prices have rebounded from four-month lows following the International Energy Agency's (IEA) surprise announcement on June 23 that member nations would release 60 million barrels of oil reserves.
The IEA said it would consider later this month whether to release more reserves. J.P. Morgan said in a report the timing of the IEA release threw a spotlight on tightness in global oil supply. "Politics aside, the main reason we can see for the precise timing of the IEA stock release was that it coincided with clear indications from tanker traffic data that Opec output would fall short of prior pledges," the bank said in a report on Thursday. "As such, it is difficult to conclude anything except that there is little or no spare capacity in the oil market."