The energy commodity fell after an uptick in jobless claims in the U.S., the world's biggest consumer of oil. Demand for the energy commodity is likely to drop in the euro zone as it struggles with the aggressive, voracious tendencies of the sovereign debt crisis.
After the U.S. Labor Department released economic data stating May saw the least amount of jobs created in one year, crude oil futures fell nearly 5 percent. Unemployment also climbed to its highest ever in the euro zone, according to the statistics office of the European Union in Luxembourg.
"You need a word stronger than terrible for the jobs report," president Stephen Schork with the Schork Group in Pennsylvania told the news source. "Everything is driven by the lousy economic data."
At 2:41 p.m. on Friday, crude oil futures fell 3.11 percent, a $3.17 drop to $98.70 per barrel.
Payrolls in the U.S. grew by 69,000, which was less than forecast in a Bloomberg poll. The U.S. unemployment rate, projected to remain at 8.1 percent, actually climbed to 8.2 percent.
"That's a very poor jobs report and it's a serious disappointment," president Michael Lynch with Strategic Energy & Economic Research in Massachusetts told the news source. "That's clearly making people think that it's time to get out of the market."
The jobless rate has been higher than 8 percent since February 2009, which represents the longest run since the U.S. Labor Department first began keeping these records in 1948.
A commodities broker also chimed in with disappointment regarding those employment figures.
"Those are terrible, terrible numbers," Phil Streible with RJO Futures in Chicago told Bloomberg. "Oil's decline is directly impacted by concerns about U.S. growth and global growth."
The energy commodity lost 17.5 percent of its value last month, according to Reuters.
The news service cited various prompts that pulled down crude oil's price. Increasing inventories of the energy commodity, underwhelming economic data and the sovereign debt crisis' unrelenting push in the euro zone each did their part to reduce the energy commodity's price.
The U.S. Energy Department said the amount of oil reserves in the U.S. for week ended May 25 notched 2.21 million barrels, pushing well past forecasts.
Also impacting price reductions of the energy commodity on Friday were disappointing economic data coming out of China, the globe's second largest consumer of crude oil.
Dow Jones Newswires reports that May manufacturing in the Asian nation slowed down more than forecast, which raised concerns about the slowdown in the nation that also hosts the globe's second largest economic system. The U.S. hosts the largest economy.
"Arguably, the direct impact on oil demand from a slowdown in China is far greater than a recession in Europe," states a note authored by analyst Paul Horsnell with Barclays, according to Dow Jones Newswires.
The past several years have seen the Asian nation's contribution to global oil demand exceed 50 percent. Last year's contribution was as much as 70 percent.
Saudi Arabia, the top generating of the member countries of the Organization of the Petroleum Exporting Countries, now manufactures more than 10 million barrels of the energy commodity per day, according to chief executive Khalid Al-Falih with Saudi Aramco.
The world's oil supply trumps demand for the hydrocarbon by 1.5 million barrels per day, the chief executive said.
"If the current – apparently rather dire – expectations regarding the path of the world economy were actually to be fulfilled, then oil prices would undershoot far lower than current values," Horsnell with Barclays said.
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