Gas falls to 5-month low on U.S. jobs data, slower growth
GASOLINE SLID to a five-month low as the U.S. and European labor markets weakened and factory output slowed in China and Europe, threatening demand for fuel.
BLOOMBERG FILE PHOTO/F. CARTER SMITH
By Barbara J Powell
WASHINGTON - Gasoline slid to a five-month low as the U.S. and European labor markets weakened and factory output slowed in China and Europe, threatening demand for fuel.
Futures sank as U.S. payrolls rose 69,000 after a revised 77,000 April gain that was smaller than initially estimated, Labor Department figures showed.
The Chinese Purchasing Managers’ Index fell to 50.4 in May from 53.3 in April, China’s statistics bureau and logistics federation said today.
A gauge of manufacturing in Europe fell to a three-year low.
“The unemployment rate didn’t help what was already an extremely negative tone in the market,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Conn. “Supplies are tight and demand picked up, but with the rest of the world in free-fall it’s going to be hard to prevent products falling as well.”
Gasoline for July delivery tumbled 6.91 cents, or 2.5 percent, to $2.6536 a gallon at 11:53 a.m. on the New York Mercantile Exchange. Prices touched $2.6331, the lowest intraday level since December.
Futures have dropped 1.2 percent this year after being up as much as 27 percent through March 26.
The U.S. jobless rate rose to 8.2 percent from 8.1 percent, while hours worked declined. The Institute for Supply Management’s factory index fell to 53.5 in May from 54.8 a month earlier, the Tempe, Ariz.-based group’s report showed.
The unemployment rate in the 17-nation euro zone was at 11 percent in April and March, the European Union’s statistics office in Luxembourg said today.
That’s the highest since the data series started in 1995. A gauge of manufacturing in the region fell to 45.1 from 45.9 in April, London-based Markit Economics said today. That’s the lowest level since mid-2009.
“The reports are giving confirmation that even the economy that everyone thought was doing OK, the U.S., is not OK,” said Dominick Chirichella, senior partner at the Energy Management Institute in New York. “Everything is a mess.”
Futures’ slide was part of a broad market plunge in commodities and equities. The Dow Jones Industrial Average erased its 2012 gain.
Crude oil for July delivery on the Nymex fell as much as 4.6 percent, leading the Standard & Poor’s GSCI index of 24 materials down 1.9 percent at 11:53 a.m. in New York.
The broad market slide could spur a rally next week on speculation that the Federal Reserve will step in with a third round of large scale asset purchases, or QE3, to stabilize the economy.