U.S. Unemployment

Crude oil extended losses, poised for a third week of decline, after a U.S. report showed unemployment in the world’s largest energy-consuming nation last month rose to the highest in almost 26 years. Oil fell more than $2 a barrel yesterday after the Labor Department said employers cut 467,000 jobs in June, a signal that U.S. fuel demand will be slow to rebound. Crude also declined as equities dropped and the dollar climbed against the euro, limiting futures purchases as an alternative investment. Declining crude oil and gasoline prices helped send the Reuters/Jefferies CRB Index of 19 raw materials lower. The index dropped 1.8 percent to 246.60.

“People are worried about the employment number because it shows the expectation of a demand recovery has faded,” said Tetsu Emori, a commodity fund manager with Astmax Ltd. in Tokyo. “The rising dollar has been adding to the bearish sentiment in the market.” Crude oil for August delivery dropped as much as 63 cents, or 0.9 percent, to $66.10 a barrel on the New York Mercantile Exchange, and was at $66.35 at 10:28 a.m. in Singapore. Oil fell $2.58 to $66.73 yesterday. Futures are down 4.1 percent this week. June’s employment decline was more than forecast and followed a 322,000 decrease in May. Payrolls were estimated to fall 365,000 after a 345,000 drop initially reported for May, based on the median of 79 economists surveyed by Bloomberg News.

“The negative jobs report was not taken well by the equities or oil market,” said Mike Sander, an investment adviser with Sander Capital in Seattle. “Helping to push oil lower was a fall in the Dow Jones by over 200 points and a drop in the euro. The jobless rate jumped to 9.5 percent, the highest since 1983, from 9.4 percent. U.S. fuel supplies increased last week by more than analysts forecast. Brent crude oil for August settlement fell as much as 79 cents, or 1.2 percent, to $65.86 a barrel on London’s ICE Futures Europe exchange. It was at $66.15 a barrel at 10:26 a.m. Singapore time. Yesterday, the contract plunged 3.1 percent to settle at $66.65 a barrel.