Oil falls to below $86 after weak US jobs report

AP News
Posted: Sep 05, 2011 1:09 AM
Oil falls to below $86 after weak US jobs report

Oil prices extended losses to below $86 a barrel Monday in Asia as a dismal August jobs report suggested that a weak U.S. economy will lessen demand for crude.

Benchmark oil for October delivery was down 65 cents to $85.80 at midday Singapore time in electronic trading on the New York Mercantile Exchange. Crude fell $2.48 to settle at $86.45 on Friday.

In London, Brent crude for October delivery was down 75 cents at $111.58 on the ICE Futures exchange.

Crude has fallen since the Labor Department said Friday that U.S. employers stopped adding jobs in August and the unemployment rate remained at 9.1 percent.

Oil had risen from $76 on August 9, the low for the year so far.

"The oil market suffered a severe blow" from the jobs figures, energy consultant Ritterbusch and Associates said in a report. "It reinforced our longer term expectation for a price decline into new low territory."

U.S. gasoline demand during the summer driving season _ from May 30 to Monday _ fell 4.1 percent from a year earlier as prices rose 34 percent, according to estimates by Barclays Capital.

"Gasoline demand has been affected by higher prices and weaker GDP," Barclays said in a report.

In other Nymex trading for October contracts, heating oil fell 2.0 cents to $2.98 per gallon and gasoline futures dropped 2.0 cents to $2.82 per gallon. Natural gas for October delivery gained 2.0 cents to $3.89 per 1,000 cubic feet.