Crude slips to seven week low

Prices drop in tandem with equities following disappointing job data

Crude prices dropped and ended at seven week low on Monday, 09 April 2012 at Nymex. Prices fell following disappointing job report that hit the wires at Wall Street on last Friday, 05 April. Crude prices fell in tandem with US stocks on Monday. As U.S. stocks and commodity markets were closed on last Friday, in observance of Good Friday, Monday was the first opportunity for investors to react to the disappointing employment data.



Light and sweet crude for May delivery fell $0.85 (0.8%) to $102.46 a barrel on the New York Mercantile Exchange on Monday. It fell to a low of $100.81 during intra day trading. Last week, crude lost 0.3%.

Crude managed to end the first quarter with gains of 4.2%. The quarterly advance follows a 25% increase in the fourth quarter of 2011, and gains of 8.2% for 2011. On the month of March, oil lost 3.8%, the worst result since September.

The market place was a bit quieter Monday as the London markets and some other European markets remained closed for the Easter holiday.

The Labor Department in US reported on Friday, 05 April that the US economy in March added the fewest number of jobs in five months, breaking a string of strong employment gains and raising questions about the strength of the U.S. recovery. As per the report, the U.S. generated 120,000 jobs last month, well below expectations. Market had expected an increase of 210,000, seasonally adjusted. Hiring also failed to top the 200,000 mark for the first time since November.

The March report also showed that while the unemployment rate fell to 8.2%, the lowest level since January 2009, the decline stemmed entirely from people dropping out of the labor force. It's the first time that's happened this year. That's usually a negative sign because it suggests jobs have become somewhat harder to find.

In the currency market on Monday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies pared earlier gains and closed the day lower by almost 0.1%.

Among other traded energy products on Monday, May gasoline fell 4 cents, or 1.3%, to $3.30 a gallon, down for the past two out of three sessions. May heating oil fell 2 cents, or 0.7%, to $3.15 a gallon.

May natural gas futures bucked the trend, gaining 2 cents to settle at $2.11 per million British thermal units. That was its first gain in three days.

At the MCX, crude oil for April delivery closed lower by Rs 52 (0.98%) at Rs 5,238/barrel. Natural gas for April delivery closed lower by Rs 0.7 (0.64%) at Rs 108.3.