The UAE wishes for a speedy recovery for all the injured
The jobs data will help investors gauge the outlook for demand growth in the world’s biggest oil consumer amid renewed worries its recovery may be faltering. Businesses outside the farm sector are expected to have added 170,000 jobs last month, according to a Reuters survey.
By 1144 GMT, Brent crude oil futures lost $1.10 to $114.98 a barrel, lows not seen since early February this year.
U.S. crude fell by $1.49 to $101.05, levels not seen since mid-April.
“Many funds are still on the long side of crude oil, but the global economic recovery remains something a bit elusive,” said Olivier Jakob from Zug-headquartered consultants Petromatrix.
Analysts are seeing increasing downside risks to prices. Nic Brown, Natixis head of commodities research, said the bank’s models indicate fair value for Brent at $110 a barrel.
“Anything north of $120 contained a large amount of political premium as the negotiations between Iran and the West appeared to make some progress, and clearly some of the premium has been taken out,” Brown said. “The very tight supply picture from earlier in the year has also eased a little.”
Oil and commodities plunged across the board on Thursday as slower-than-expected growth in the U.S. services sector sparked a wave of selling and prices crashed through technical support levels.
Brent has so far fallen by more than 4 percent this week, its steepest slide since the week ended Dec. 18, while U.S. oil has lost more than 2.7 percent, its biggest weekly decline in a month.
“There is a lack of directional conviction in terms of the absence of strong fundamentals or economics news, so you’re looking at the market coming off the highs of the February rally,” BNP Paribas head of commodities strategy Harry Tchilinguirian said.
“CFTC (Commodity Futures Trading Commission) data over the last couple of weeks has seen investors cutting back on exposure to futures, so with less support in terms of commitment and a low volatility environment, people are taking profits on oil.”
Oil prices also came under pressure after industry data provider Genscape reported that crude inventories at the Cushing, Oklahoma, delivery point for U.S. futures hit a fresh record high on May 1.
The Organization of the Petroleum Exporting Countries is working hard to bring down prices that jumped towards $130 a barrel earlier this year, its secretary general said on Thursday, and is pumping much more than its official target even as exports from member country Iran dwindle.
“We are seeing a slightly easing situation as far as the supply-demand balance is concerned against the backdrop of the global economic growth and OPEC production levels,” said Ric Spooner, chief market analyst at CMC Markets. “There is a downside bias to oil prices.”
Defiant statements from Iran on Friday failed to provide support for prices, even though an envoy said the country would never suspend its uranium enrichment programme and saw no reason to close the Fordow underground site.
“When you have a safe place, secure place under IAEA control, then why do you tell me that I should close it?” Iran’s ambassador to the International Atomic Energy Agency, Ali Asghar Soltanieh, told Reuters.
“Fordow is a safe place. We have spent a lot of money and time to have a safe place,” Soltanieh added.
Iran and major powers resumed talks in mid-April in Istanbul after a gap of more than a year. Investors viewed the resumption as a chance to ease escalating tension and help to avert the threat of a new Middle East war. They are to meet again on May 23 in Baghdad.
The five permanent members of the U.N. Security Council said they expected talks with Tehran to lead to concrete steps toward a negotiated solution.
Brent has gained 8 percent this year, touching a high of over $128 in March, on concerns that the tensions with over Iran’s disputed nuclear programme would disrupt supplies from the Middle East.
The UAE wishes for a speedy recovery for all the injured
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