LONDON: Oil slipped to around $115 per barrel on Friday, ahead of a US payrolls report, and was set for its steepest weekly fall since December due to concerns over the health of the global economy and easing fears over supply disruption.
The jobs data will help investors gauge the outlook for oil demand growth in the world's top oil consumer, amid renewed worries the country's recovery may be faltering.
Businesses outside the farm sector are expected to have added 170,000 jobs last month in the US, according to a Reuters survey.
By 1039 GMT, Brent crude oil futures lost $1.08 to $115.00 a barrel, after racking up a 3 percent loss in two straight sessions, the benchmark's biggest two-day percentage loss since Feb. 28. US crude fell by $1.27 to $101.27, after ending about 2.5 percent lower.
"Many funds are still on the long side of crude oil, but the global economic recovery remains something a bit elusive," said Olivier Jakob from Zuf-headquartered consultants Petromatrix.
Oil and commodities plunged across the board on Thursday, as slower-than-expected growth in the US services sector sparked a wave of selling that sent prices crashing through technical support levels on price charts.
Brent has so far fallen by more than 4 percent this week, its steepest slide since the week ended Dec. 18, while US oil has lost more than 2.7 percent, its biggest weekly decline in a month.
"There is a lack of directional conviction, in terms of the absence of strong fundamentals or economics news, so you're looking at the market coming off the highs of the February rally," BNP Paribas head of commodities strategy Harry Tchilinguirian said.
"CFTC (Commodity Futures Trading Commission) data over the last couple of weeks has seen investors cutting back on exposure to futures, so with less support in terms of commitment and a low volatility environment, people are taking profits on oil."
Oil prices also came under pressure after industry data provider Genscape reported that crude inventories at the Cushing, Oklahoma, delivery point for US futures hit a fresh record high on May 1.
The Organization of the Petroleum Exporting Countries (OPEC)is working hard to bring down oil prices that jumped towards $130 a barrel earlier this year, its secretary general said on Thursday, and is pumping much more than its official target even as exports from member country Iran dwindle.
"We are seeing a slightly easing situation as far as the supply-demand balance is concerned against the backdrop of the global economic growth and OPEC production levels," said Ric Spooner, chief market analyst at CMC Markets. "There is a downside bias to oil prices."
IRAN
Defiant statements from Iran on Friday failed to provide support for prices, with an envoy saying the country will never suspend its uranium enrichment programme and sees no reason to close the Fordow underground site.
"When you have a safe place, secure place under IAEA control, then why do you tell me that I should close it?" Iran's ambassador to the International Atomic Energy Agency, Ali Asghar Soltanieh, told Reuters.
"Fordow is a safe place. We have spent a lot of money and time to have a safe place," Soltanieh added.
Iran and major powers resumed talks in mid-April in Istanbul after a gap of more than a year, with investors viewing the resumption as a chance to ease escalating tension and help to avert the threat of a new Middle East war. They are to meet again on May 23 in Baghdad.
The five permanent members of the UN Security Council said they expected talks with Tehran to lead to concrete steps toward a negotiated solution.
Brent has gained 8 percent this year, touching a high of over $128 in March, on concerns that escalating tensions with the West over Iran's disputed nuclear programme would disrupt supplies from the Middle East.
Comments
Comments are closed for this article.