Light crude oil prices trading lower on US jobs data

Light, sweet crude oil futures prices for November delivery on NYMEX is trading at a session low of $68.86 a barrel and was trading down $1.73 at $69.09 a barrel around 8:47 a.m. Eastern time. The sell off picked up pace as the contract broke below Thursday’s session low of $69.13 a barrel.

The US unemployment rate rose to 9.8% in September, in line with forecasts, and up from 9.7% in August. The decline in non-farm payrolls was 263,000, more than the 175,000 expected by analysts surveyed by Dow Jones Newswires.

The dollar gained against the euro after the jobs data, putting pressure on crude. Inspired by the weak dollar recently, investors have poured funds in commodities, especially crude oil, as a safe harbor. Foreign investors also are attracted to oil investments when the dollar is weak.

Traders said the data, which shows continued weakness in the economy, hits the market as geopolitical risks that helped inflate oil prices are diminishing.

Tensions appear to be easing between Iran and six major powers after talks Wednesday, in which Iran agreed to further cooperation with the International Atomic Energy Agency over its nuclear program.

The talks came as the US was talking of tougher sanctions on Iran, OPEC’s second-biggest oil producer and a nation that sits at the mouth of the Strait of Hormuz, the transit point for 40% of the world’s oil shipments. Iran’s position at the negotiating table lessens the odds of a serious threat to those shipments, analysts said.

Tags:  data, light oil prices, NYMEX, US