Weak US jobs data pushes oil to three-month low

London: Oil fell to three-month lows of under $115 (Dh422.37) per barrel yesterday and was on course for its steepest weekly fall since December after a weak US jobs report added to doubts about the pace of economic recovery in the world's biggest oil consumer. US employers hired 115,000 workers last month, the Labour Department said yesterday, which was below the 170,000 new jobs forecast and led to concerns that demand growth could stall.

By 1241 GMT, Brent crude oil futures lost $1.48 to $114.60 a barrel, lows not seen since early last February. US crude fell by $1.87 to $100.67, levels not seen since mid-April.

"The poorer US economic data from the past two days have sparked doubts that oil demand will recover in the US, the world's largest consumer of oil," Commerzbank oil analysts Carsten Fritsch and Eugen Weinberg said in a note. "Furthermore, the current supply surplus is weighing on prices."

Analysts are seeing increasing downside risks to prices. Nic Brown, Natixis' head of commodities research, said the bank's models indicate fair value for Brent at $110 a barrel.

"Anything north of $120 contained a large amount of political premium as the negotiations between Iran and the West appeared to make some progress, and clearly some of the premium has been taken out," Brown said. "The very tight supply picture from earlier in the year has also eased a little."

Oil and commodities also plunged across the board on Thursday as slower-than-expected growth in the US services sector sparked a wave of selling and prices crashed through technical support levels.

"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 Zug-headquartered consultants Petromatrix.

"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," BNP Paribas head of commodities strategy Harry Tchilinguirian said.

Brent has gained 6 per cent this year, touching a high of over $128 in March, on concerns that the tensions with over Iran's disputed nuclear programme would disrupt supplies from the Middle East.

Efforts on to bring prices down

The Organisation of Petroleum Exporting Countries (Opec) is working hard to bring down prices that jumped towards $130 (Dh477.46) 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.

US crude inventories rose for a sixth straight week last week to the highest level since 1990 as stocks at the Cushing, Oklahoma hub shot up to a fresh record, according to weekly data from the US Energy Information Administration on Wednesday.