Oil hovers above US$66 after weak European jobs data

By midday in Europe, benchmark crude for August delivery slipped 22 cents to US$66.51 a barrel in electronic trading on the New York Mercantile Exchange. On Thursday, it fell US$2.58, nearly 4 percent, to settle at US$66.73.

Trading in the U.S. is closed Friday for the Independence Day holiday. Oil came off an eight-month intraday high of US$73.38 a barrel earlier this week on growing investor concerns that a doubling of the crude price since March isn't justified by a sluggish global economy.

“Renewed concern over the global economy, reflected in lower equities, is the main driver of weaker oil market sentiment,” said Britain's KBC Market Services. “However, in contrast to recent months, weak oil market fundamentals seem at last to be exerting some influence.”

KBC mentioned rising oil inventories and U.S. gasoline stocks as evidence of weak demand.

“There is no longer a shortfall, or support, in any key sector of the oil complex,” KBC said.

Weak jobs figures released Thursday suggested consumption will remain tepid and crude demand may not pick up quickly.

A Labor Department report showed the U.S. economy lost a larger-than-expected 467,000 jobs in June. The unemployment rate climbed to 9.5 percent, a 26-year high.Unemployment in the 16 countries that use the euro spiked to a ten-year high in May, also at 9.5 percent. The dismal economic data undermined investor confidence and sent the Dow Jones industrial average down 2.6 percent Thursday. Most Asian and European stock indexes also were lower Friday.

In other Nymex trading, gasoline for August delivery was down 0.68 of a cent to US$1.7840 a gallon and heating oil lost 0.49 of a cent to US$1.6967. Natural gas for August delivery rose 6 cents to US$3.675 per 1,000 cubic feet.

In London, Brent prices slid 24 cents to US$66.41 a barrel on the ICE Futures exchange.

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