HOUSTON: Oil prices fell on Wednesday after the US government revised significantly lower the number of jobs added in the year to March, pressuring investor sentiment.
Brent crude futures were down $1.04, or 1.35%, at $76.16 a barrel by 1:00 p.m. EDT, while US West Texas Intermediate crude futures were down $1.15 or 1.15% at $72.02.
US employers added far fewer jobs than originally reported in the year through March, the Labor Department said on Wednesday. “The market is now going from pricing in a stronger economy to a potential hard landing, which is why oil prices are reluctant to move higher,” said Phil Flynn, analyst with Price Futures Group.
The department’s estimate for total payroll employment for the period from April 2023 to March 2024 was lowered by 818,000. “The sting in the scorpion’s tail that hurts worse than anything is that this data helped create a crisis of confidence,” said Tim Snyder, chief economist at Matador Economics. The revised job data offset support from a drop in US oil inventories.
US crude stocks, gasoline and distillate inventories fell in the week ending Aug. 16, the Energy Information Administration (EIA) said on Wednesday.
Crude inventories fell by 4.6 million barrels to 426 million barrels in the week, the EIA said, compared with analysts’ expectations in a Reuters poll for a 2.7 million-barrel draw. Meanwhile, investors’ worries persisted over the prospect of economic weakness in China weighing on the country’s crude demand. China’s economic struggles have contributed to weak processing margins and low fuel demand that has curbed operations at state-run and independent refineries.
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