Oil price drop: Sinks below $96 a barrel
Oil price drop: Oil has retreated after gaining 35 percent from February to reach $114 last week. Other commodities that had jumped in recent months, such as gold and silver, have also seen steep declines this week.
J Pat Carter/AP
Benchmark crude for June delivery was down $3.86 at $95.94 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. In London, Brent crude for June delivery was down $3.79 to $107.01 a barrel on the ICE Futures exchange.
The contract plunged $9.44 to settle at $99.80 on Thursday — the biggest one-day percentage decline since April, 2009 — because of signs U.S. economic growth is slowing. The Labor Department said that first-time claims for unemployment benefits rose to 474,000 last week, the highest level in eight months.
Investors will be closely watching the government's non-farm payroll numbers scheduled to be released later Friday. Economists forecast that employers added 185,000 workers in April and the unemployment rate is expected to remain unchanged at 8.8 percent.
Oil has retreated after gaining 35 percent from February to reach $114 last week. Other commodities that had jumped in recent months, such as gold and silver, have also seen steep declines this week.
"Downward momentum has accelerated during the past couple of days due to disappointing economic releases," Ritterbusch and Associates said in a report.
A stronger dollar, which makes oil more expensive for investors with other currencies, also helped push crudeprices down.
"Those geopolitical risks have not disappeared," said Victor Shum, an analyst with energy consultancy Purvin & Gertz in Singapore. "I think the up trend over the long term is still in tact, and what we saw yesterday was a big bump in the road."
In other Nymex trading in June contracts, heating oil fell 7.5 cents to $2.81 a gallon and gasoline slid 7.0 cents to $3.03 a gallon. Natural gas futures were down 3.1 cent at $4.23 per 1,000 cubic feet.