Friday April 3, 03:50 PM
Oil prices sag on poor US jobs report
LONDON (AFP) - Oil prices slipped back on Friday, reversing earlier gains after a weak US jobs report highlighted the poor state of the recession-hit American economy.
In late afternoon London trade, Brent North Sea crude for delivery in May dropped 26 cents to 52.49 dollars a barrel, after rocketing 4.31 dollars on Thursday.
New York's main contract, light sweet crude for May, dipped 75 cents to 51.89 dollars after gaining 4.25 dollars Thursday.
The US unemployment rate jumped to a 25-year high of 8.5 percent in March as recession-hit employers shed another 663,000 jobs, the Labor Department reported Friday.
The monthly snapshot, seen as one of the best indicators of economic momentum, showed widespread job losses across most sectors of the economy as the jobless rate rose from 8.1 percent in February.
The weak figures are a central concern for the oil market because the United States is the world's biggest energy consuming nation.
"We continue to believe that weak economic growth and slumping oil demand over the next few months will mean any rallies in the crude oil price will be unsustainable," said Deutsche Bank analyst Michael Lewis.
Earlier Friday, oil prices climbed above 53 dollars, building on Thursday's strong rally caused partly by hopes of higher energy demand thanks to G20 efforts to kick-start the global economy.
Leaders from the Group of 20 rich and emerging economies agreed Thursday at a London summit on a raft of measures to pull the global economy out of its current crisis, including a huge funding programme.
The summit also allocated more than one trillion dollars to the International Monetary Fund and other institutions, ordered a crackdown on tax havens and excessive corporate pay, and new measures to help poor nations.
Oil prices also rallied on Thursday as the dollar fell, making commodities priced in the US unit cheaper for holders of stronger currencies, traders said.
The European Central Bank's decision to lower its key interest rate to a record low 1.25 percent on Thursday was also expected to be positive for oil prices in the immediate term.
A spreading worldwide recession has ravaged energy demand and slashed oil prices from their record peaks of above 147 dollars last July.
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