Friday, May 06, 2011
Rigzone Staff
by Matthew V. Veazey
June crude oil returned to triple-digit territory Friday but only temporarily.
Oil ultimately lost $2.62 to settle at $97.18 a barrel, but it peaked at $102.38 after the U.S. Department of Labor reported encouraging nonfarm payroll figures. The agency reported that nonfarm payroll employment added 244,000 jobs last month, beating expectations. In addition, it announced that the private sector added 268,000 jobs during the same period.
The positive development was short-lived, however. Dragging oil back downward were a higher U.S. unemployment rate and a stronger dollar. In the case of unemployment, the Labor Department announced the country's unemployment rate rose from 8.8 to 9.0 percent in April.
Meanwhile, the euro weakened against the dollar on a German media outlet's claim that the Greek government is weighing leaving the euro zone. Greece's Finance Ministry denied the claim, calling the report "completely untrue." A stronger dollar makes crude oil less attractive to investors holding other currencies.
Crude oil bottomed out at $94.63 Friday. Since last Friday, oil has fallen 14.7 percent. The indicators of slowing economic growth, coupled with a higher-than-expected build in inventories as reported Thursday by the U.S. Energy Information Administration, have also ended natural gas' recent rally. Natural gas for June delivery lost 2.5 cents Friday to settle at $4.235 per thousand cubic feet.
June natural gas fluctuated from $4.22 to $4.34 during Friday's session. For the week, gas is down 11 percent.
Front-month gasoline lost a penny to end the day at $3.09 a gallon. The June contract traded within a range from $2.99 to $3.18. Gasoline is down 10.7 percent for the week.
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