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Oil Stays Around $100 After Weak Jobs Report

Friday, 03 Jun 2011 10:52 AM

Oil stayed around $100 per barrel Friday despite a series of gloomy reports that suggested the economy may be slowing.

Benchmark West Texas Intermediate crude for July delivery was down 38 cents at $100.02 per barrel in afternoon trading on the New York Mercantile Exchange. It's hovered around the $100 mark since early May.

"It's like there's a magnet on that $100 level," independent oil analyst Jim Ritterbusch said. "As soon as we get $2, $3 away in either direction, it snaps back."

One reason for the relative stability of oil is its relationship to the dollar. Crude is priced in U.S. currency, so oil and the dollar often move in opposite directions. When the dollar rises, for example, it makes oil more expensive for investors holding foreign currency, so oil prices fall. When the dollar tumbled this week, the weak dollar buoyed oil, keeping it from falling further.

Oil withstood a steady drumbeat of anemic readings this week for U.S. housing, manufacturing, retail sales, consumer confidence, and petroleum demand. As the summer driving season began, the government said oil supplies grew while Americans pumped less gas.

The Labor Department's jobs report on Friday was the latest in a series of disappointing economic data this week. The U.S. added 54,000 jobs in May, the fewest in eight months. During the previous three months, the economy added an average of 220,000 jobs per month.

Manufacturers cut 5,000 jobs, retailers slashed 8,500 positions and leisure and hospitality businesses dropped 6,000 jobs. Lackluster hiring could mean fewer drivers on the road and gasoline consumption may continue to slide this summer.

Gasoline pump prices increased less than a penny on Friday to a national average of $3.789 per gallon, according to AAA, Wright Express and Oil Price Information Service.

Ongoing refining problems in the Midwest have pushed gasoline prices sharply higher in that part of the country. On Michigan the average retail price increased more than 8 cents overnight to $4.14 per gallon. Pump prices added nearly 7 cents at $3.94 in Ohio, and they were almost 6 cents higher in Illinois at $4.15 per gallon.

Meanwhile, the average price for a gallon of gas was only $3.50 in South Carolina, $3.61 in Missouri and $3.72 in Colorado.

In other Nymex trading for July contracts, heating oil was flat at $3.0439 per gallon and gasoline futures added about a penny at $2.9803 per gallon. Natural gas dropped 5 cents to $4.743 per 1,000 cubic feet.

In London, Brent crude was down 5 cents at $115.49 per barrel on the ICE Futures exchange.

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Oil stayed around $100 per barrel Friday despite a series of gloomy reports that suggested the economy may be slowing. Benchmark West Texas Intermediate crude for July delivery was down 38 cents at $100.02 per barrel in afternoon trading on the New York Mercantile...
Oil,Prices,crude,gasoline,us,economy
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2011-52-03
Friday, 03 Jun 2011 10:52 AM
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