Global oil prices slide, rout undeterred by U.S. jobs data

By Catherine Ngai

NEW YORK (Reuters) – Global oil prices slid further on Friday, with Brent on track for the first weekly close below $70 a barrel since 2010, as strong U.S. employment data did little to lift the oil market’s bearish mood a day after Saudi Arabia cut official selling prices.

Brent and U.S. crude remained near five-year lows as the market grappled with oversupply resulting from the U.S. shale boom and the recent decision by the Organization of Petroleum Exporting Countries not to cut production.

Prices increased from earlier lows after stronger-than-expected U.S. employment data. November nonfarm payrolls rose 321,000, the most since January 2012. Still, the market remained lackluster and subdued, traders said.

“We just had the best economic news come out for some time and the market went nowhere,” said Carl Larry, director of business development consultant for oil and gas at Frost & Sullivan. “Traders, hedge funds, oil companies – they’re saying that we might as well take some money off the table. Volumes are thin and choppy. Everyone is waiting for the weekend.”

Analysts said the Saudi cuts to monthly prices for crude it sells to the United States and Asia show it is stepping up its battle for market share.

“I feel like we’re in the balance here,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “The Saudis’ cutting their price is causing people to sell oil. And, the market is still weak.”

The January Brent crude contract was down 29 cents at $69.35 by 1:44 p.m. EST (1844 GMT). It briefly turned positive after mid day. Meanwhile, U.S. crude fell by 75 cents to $66.06 a barrel. Both were on track for their ninth loss in 10 weeks.

The dollar index <.DXY> hit a intraday high of 89.467, the highest since March 2009. A stronger dollar makes commodities denominated in the greenback less affordable to holders of other currencies.

The strength of U.S. economy, as evidenced by the employment data, contrasts with that of the euro zone, where Germany’s Bundesbank this week halved its 2015 growth forecasts for Europe’s largest economy to 1 percent.

The supply of North Sea crude that underpins the Brent benchmark will average 871,000 barrels per day (bpd) in January, according to loading programs provided by trade sources.

(Additional reporting by Libby George and Ahmed Aboulenein in London, Florence Tan and Manolo Serapio Jr. in Singapore; Editing by Steve Orlofsky; Editing by Jason Neely, Mark Potter, Jessica Resnick-Ault and David Gregorio)

Global oil prices slide, rout undeterred by U.S. jobs data