Updated on
Summary Oil prices fell nearly 4 percent on slowing global economy and waning oil demand.
Oil plunged nearly 4 percent Friday as a bleak report on U.S. job growth heightened worries about a slowing global economy and waning oil demand. Sobering economic news from China and Europe also contributed to the drop.West Texas Intermediate, the benchmark for oil in the U.S, fell $3.30, or 3.7 percent, to $83.23 per barrel, the lowest price since early October. The drop adds to a 17 percent decline in May.Brent crude, which is used to price international oil, lost $3.44, or 3.4 percent, to $98.43 per barrel, its lowest price since January 2011.The reports on jobs and manufacturing are the latest signals that the U.S. economy is growing more slowly. At the same time, Europe is embedded in a financial crisis and Chinas government is working to prevent economic growth there from slowing too quickly. Thats led to rising concerns that oil demand may weaken in the months ahead.U.S. employers added 69,000 jobs in May, the government said, which is the smallest number in a year and far short of the 158,000 new jobs expected by economists. The unemployment rate rose to 8.2 percent from 8.1 percent in April.Cheaper oil means cheaper gasoline. The national average is now $3.61 per gallon (95 cents a liter), 33 cents below their April peak of $3.94, according to AAA, Wright Express and the Oil Price Information Service.Energy futures fell across the board, as did global stock markets. Heating oil fell 7.53 cents to $2.628 per gallon, gasoline futures fell 6.59 cents to $2.657 per gallon and natural gas dropped 9.6 cents to $2.326 per 1,000 cubic feet. The S&P 500 stock index and the Dow Jones industrial average fell more than 2 percent in afternoon trading. Markets in Europe fell 2 percent or more. Markets in Asia showed smaller declines.
