Oil falls to near $70 as oil traders eye US economy

Oil prices fell to near $70 a barrel Friday in Asia as signs of a sluggish US economic recovery discouraged stock and crude futures investors. Benchmark crude for November deliver was down 63 cents at $70.19 by midday in Singapore in electronic trading on the New York Mercantile Exchange. The contract added 21 cents to settle at $70.82 on Thursday.

Crude has weaved around $70 for months amid mixed signals about the strength of the U.S. economic recovery. On Thursday, poor economic data sparked a sell-off in U.S. stock markets.

The Labor Department said new claims for jobless benefits rose last week to 551,000, more than analysts expected. And the Institute for Supply Management said its index of manufacturing activity in September fell when analysts had expected an increase. The Dow Jones industrial average fell 2.1 percent Thursday while most Asian stock markets slid in early trading Friday.

“At $70 a barrel, investors have priced in a fairly sharp economic recovery,” said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore. “That makes it vulnerable to bad economic news.”

Investors will be closely analyzing the government’s monthly jobs report, which is scheduled to be released later on Friday. In other Nymex trading, heating oil fell 1.35 cents to $1.81 a gallon. Gasoline for November delivery dropped 1.21 cent to $1.75 a gallon. Natural gas for November delivery lost 3.0 cents to $4.44 per 1,000 cubic feet.

In London, Brent crude fell 53 cents to $68.66 the ICE Futures exchange.

Tags:  economy, oil prices, traders, US