Oil prices slide on weak US unemployment data

SINGAPORE / KUWAIT CITY - Agence France-Presse

A man is seen pumping gas at a station in Atlanta in this March photo. Gasoline prices were on the rise due to the unrest in the Middle East. Prices fill slightly yesterday. AP photo

Oil prices slid in Asian trade yesterday, underpinned by weaker-than-expected unemployment data from the United States, the world’s largest economy, analysts said.

New York’s main contract, West Texas Intermediate crude for delivery in May, shed $1.11 to $102.20 per barrel. Brent North Sea crude for May settlement was down $1.00 at $122.43 in the afternoon.
“The market is primarily driven by the US jobs report that showed slow hiring,” said Victor Shum, senior principal at Purvin and Gertz international energy consultants in Singapore.

“The hiring numbers were poorer than expected... and we are seeing a selling in oil futures as well as equities,” he added.

Despite unemployment in the United States dropping to the lowest rate in more than three years in March, the Labor Department reported on April 6 that the number of unemployed workers hovered close to 13 million and hiring slowed, a warning sign that its recovery may be in trouble. The economy created a meager 120,000 jobs in March, much lower than the 200,000 forecast by economists. Retail trade employment fell by 34,000 in March, with most of the losses coming from large merchandise stores.

The health of the U.S. economy is closely watched by the market because it is the world’s biggest oil consumer.

Kuwait production steady

Meanwhile, OPEC member Kuwait’s oil production is averaging 3.0 million barrels per day, a senior official said yesterday, an output level it has kept up for the past seven months.

“Kuwait is producing at an average of three million bpd. This is (almost) the production capacity but we have a spare capacity of between 150,000-200,000 bpd,” head of state-owned Kuwait Oil Co. Sami al-Rasheed told reporters.

Kuwait boosted its daily output to around three million bpd in September and has maintained those levels in the face of rising global demand for crude oil.

Rasheed said that the Gulf emirate plans to launch seismic studies this year off the coast
of Kuwait City to explore whether to go ahead with drilling operations or not.