By Christian Berthelsen
Oil futures extended losses for a second day on Friday in tandem
with stock markets.
Light, sweet crude for delivery in September was down 85 cents,
or 0.9%, at $97.32 a barrel on the New York Mercantile Exchange.
The contract touched its lowest point since Feb. 5 in overnight
trading and hasn't closed below $98 a barrel since March 12.
Oil futures pared losses briefly in early trading after U.S.
jobs data for July showed the unemployment rate ticked up to 6.2%
from 6.1%, while payroll gains of 209,000 were lower than the
average analysts' estimate of 230,000. The weaker-than-expected
data were taken across markets as a signal that the Federal Reserve
could hold off on raising interest rates, extending easy-money
policies that have fueled the long-running rise in risk assets
before Thursday's steep selloff.
But the slide in oil prices resumed as fundamental factors
weighed. The market remains adequately supplied, and the unexpected
shutdown of a Kansas refinery, which could last as long as a month,
is expected to reduce demand for oil from the key delivery point
for the U.S. benchmark contract at Cushing, Okla., arresting a
trend of declining inventories there that has been one of the
biggest bullish drivers for the market all year.
Taken together, the factors have combined to drive bullish
investors out of oil markets, where speculative levels have been
hitting all-time highs.
"Large institutional traders now appear headed for the exits and
this week's selloff could easily extend through much of next week,"
research consultancy Ritterbusch & Associates said in a
note.
Global Brent crude futures were down 70 cents, or 0.7%, to
$105.32 a barrel on the ICE Futures Europe Exchange.
Oil prices have been on a prolonged losing streak since surging
to start the year, with the U.S. contract declining 6.8% in July
and Brent falling 5.6%, as worries about instability in Iraq, Libya
and Eastern Europe have failed to affect global supply-demand
balances. U.S. crude lost 2.1% in Thursday trading, its largest
one-day decline since July 11.
Front-month September reformulated gasoline blendstock, or RBOB,
fell 2.65 cents, or 1%, to $2.7710 a gallon on the Nymex. September
diesel was down 0.89 cent, or 0.3%, at $2.8810 a gallon.
Write to Christian Berthelsen at christian.berthelsen
@wsj.com
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