Brent crude dips to 8-month low

NEW YORK: Brent crude oil fell to an eight-month low below $ 105 a barrel yesterday and was on course for the biggest weekly slide since June, as a weak US jobs report fed worries about the economy in the world's largest oil consumer.
The US Labor Department reported that employers added just 88,000 jobs in March, the slowest pace of hiring in nine months. The jobless rate ticked 0.1 point lower to 7.6 percent, largely due to people dropping out of the workforce.
Analysts polled by Reuters had predicted a 200,000 increase in US jobs, down from 236,000 in February.
Brent crude oil prices were on course for the biggest weekly loss since June, down more than 5 percent, and have fallen by almost $ 15 a barrel since early February.
Richard Ilczyszyn, founder and chief market strategist at iitrader.com LLC in Chicago, said traders were far less optimistic about the strength of oil demand than at the start of the year.
"Every first quarter bodes well for energy prices because we're optimistic," he said.
"But we had gone up so far, so fast without real improving data. We saw today with the jobs report translating into lower energy prices that it was not a real rally, but more of an easy money rally."
At 12:21 p.m. EDT (1621 GMT), Brent was down $ 1.57 at $ 104.87 a barrel, having earlier fallen more than $ 2 to a low of $ 104.20, its lowest price since August.
US crude CLc1 dropped 69 cents to $ 92.57, off an earlier low of $ 91.91 a barrel. US crude has fallen by almost 5 percent this week, its biggest weekly loss since September.
Data from top oil consumer the United States has disappointed all week with weaker-than-expected growth in manufacturing, private sector hiring and employment. A surge in US crude inventories to the highest since 1990 has further pressured prices.
Oil and commodities markets started 2013 in a buoyant mood on hopes of a sharp revival in global economic activity.
However, this optimism faded through the first quarter as data showed slower-than-expected growth in emerging economies, deepening recession in parts of Europe and a tepid expansion in the United States.
Even an aggressive move by the Bank of Japan to pump more than $ 1.4 trillion into the economy in less than two years failed to lift investor confidence.
Abdallah Al-Badri, Secretary General of the Organization of the Petroleum Exporting Countries, said on Thursday oil prices were at a comfortable level for both producers and consumers.
But Al-Badri told an oil conference in Paris that "if prices fall below certain levels, then many investors will find their developments no longer viable".
Analysts say OPEC could be forced to act if oil prices drop much further.
"At some point, OPEC will have to do something if prices fall below $ 100," said Carsten Fritsch, senior oil analyst at Germany's Commerzbank. "OPEC would either have to cut output, or at least, not increase production as they have been planning."
FROM: REUTERS