Oil prices fall after report shows unemployment rate reaching 26-year high
NEW YORK
Oil prices fell on Friday after the government reported that the unemployment rate moved to a 26-year high, raising fresh concerns that energy demand will remain weak even if the economy is heading out of the recession.
Benchmark crude for October delivery fell 15 cents to $67.81 a barrel in on the New York Mercantile Exchange. The contract Thursday slipped 9 cents to settle at $67.96.
The Labor Department said Friday that the unemployment rate rose to 9.7 percent in August, the government said. With 216,000 jobs lost, unemployment has reached levels last seen in 1983.
Millions of Americans have lost jobs and fewer people are traveling because of unease about the economy.
"Not as many people working means they are not consuming energy," PFGBest analyst Phil Flynn said.
Oil prices are off more than $5 this week as the summer driving season concludes with the Labor Day weekend. Demand for gasoline typically weakens during the fall. At the same time, supplies remain ample.
Trading will be closed in the U.S. on Monday for the holiday.
Prices at the pump, like crude prices, have narrowed to a close range for the past month after being so volatile a year ago. Prices fell 0.5 cents overnight to $2.591 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. That price is just 0.6 cents higher than a month ago. Prices, however, remain $1.087 a gallon below year-ago levels.
In other Nymex trading, gasoline for October delivery fell 2.4 cents to $1.7693 a gallon, and heating oil fell 1.5 cents to $1.72 a gallon. Natural gas rose 12 cents to $2.63 per 1,000 cubic feet.
In London, Brent crude fell 48 cents to $66.64.
---
Associated Press writers Pablo Gorondi in Budapest, Hungary, and Alex Kennedy in Singapore contributed to this report.
