Oil prices fall on global oil glut fears, weaker US jobs data
SINGAPORE – Oil prices fell on Monday as concerns of global oversupply, a firmer dollar and lacklustre US nonfarm payroll data on Friday weighed on oil markets.
The long Labor Day holiday in the United States may also lead to thin trading later in the session.
“US nonfarm payrolls turned out weaker than expected causing oil prices to fall on anticipations of a weaker economy,” Singapore’s Phillip Futures said in a Monday note.
Brent crude for October delivery LCOc1 fell 25 cents to $49.36 a barrel as of 0419 GMT (12:19 a.m. EDT), after ending the previous session down $1.07, or 2.1 percent. The European benchmark fell almost 1 percent last week.
US crude for October delivery CLc1, also known as West Texas Intermediate, was down 22 cents at $45.83, after settling 70 cents down, or 1.5 percent, in the previous session.
“We would think that prices should be moving downwards this week as prices would hardly find support,” Phillip Futures said in its note.
US jobs data on Friday showed nonfarm payrolls increased 173,000 last month compared with economists forecasts of a 220,000 gain.
A surprise gain in US crude stocks of 4.7 million barrels in the week to Aug. 28, the biggest one-week rise since April, added to worries of an oil glut.
That was despite the number of US oil rigs falling by 13 to 662 last week, according to Baker Hughes data, the first decline in rig counts in seven weeks.
A firmer US dollar .DXY also hurt oil prices by making the commodity more expensive for holders of other currencies.
Investors are now awaiting second quarter eurozone GDP growth figures on Tuesday to give oil further direction.
“Although it would seem that heavier emphasis has been placed on both China and the US, Eurozone’s demand remains important as well. Provided Eurozone Q2 GDP remains strong, we could be seeing some support to oil prices,” Phillip Futures said. -Reuters