Oil fall 1 Percent As U.S. Data Soft, Storm Threat Recedes
Oil prices fell around 1 percent on Friday, heading for a weekly decline, as weaker-than-expected U.S. economic data weighed on the energy demand outlook and Hurricane Joaquin veered away from oil installations in the U.S. East Coast.
The dollar’s drop limited losses in oil. The currency fell on concerns that the U.S. economy may still be too weak to allow the Federal Reserve to raise interest rates this year.
Oil and most other commodities are traded in dollars and a weaker greenback makes those raw materials more affordable to users of the euro and other currencies.
Brent, the global oil benchmark, was down 62 cents, or 1.3 percent, at $47.07 a barrel by 11:45 a.m. EDT (1545 GMT).
U.S. crude was off 60 cents, or also about 1.3 percent, at $44.14.
Both Brent and U.S. crude were down about 3 percent on the week.
U.S. employers slammed the brakes on hiring over the last two months and wages fell in September. U.S. factories were feeling the global chill and shed 9,000 jobs in September after losing 18,000 in August, according to the Labor Department’s survey of employers.
Separately, U.S. factory orders fell 1.7 percent in August, data on Friday showed.
The weaker U.S. data “just took a rate hike off the table for this year and heightens fear of a global slowdown,” said Chris Jarvis, energy analyst at Caprock Risk Management in Frederick, Maryland.
Hurricane Joaquin pounded the Bahamas for a second day with powerful winds and waves, but was not expected to be a major threat to the U.S. East Coast, the U.S. National Hurricane Center (NHC) said.
The U.S. East Coast is home to the New Jersey coast and New York Harbor, where several oil refineries, pipelines and other energy infrastructure are located.
Traders and investors will be looking out at 1 p.m. EDT (1700 GMT) for the weekly reading on the U.S. oil rig count to gauge how domestic crude production was faring.
The data, issued by industry firm Baker Hughes, showed last week that U.S. energy firms cut oil rigs for a fourth week in a row, although the drop of four rigs was also the smallest since the declines began. [RIG/U]