Brent crude drops below $100 after weak economic data

Fri Jun 1, 2012 4:15pm EDT
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By Robert Gibbons

NEW YORK (Reuters) - Brent crude oil prices fell for a fourth straight day on Friday, dropping under $100 a barrel to a 16-month low after weak U.S. and Chinese economic data thrashed markets and sent investors to perceived safer havens.

Data showing U.S. job growth stumbled in May and the first rise in the jobless rate in nearly a year added to concerns about the health of the global economy after a report indicating a slowdown in No. 2 oil consumer China's manufacturing sector dragged crude down in early trade.

The weak data added to ongoing worries about the impact of the euro zone crisis on fuel demand, which have helped pull Brent crude from 2012 peaks over $128 a barrel in early March.

"The negative employment data caps the recent deterioration in global economic data," said John Kilduff, partner at Again Capital in New York.

"From China to Europe to the U.S., all the data have shown real slowing."

In May, both Brent and U.S. crude posted their biggest monthly losses since late 2008, as trader focus on the potential disruption of Iranian oil supplies due to Western sanctions against Tehran was countered by the wider economic concerns.

Friday's bearish sentiment swept across markets, with U.S. stocks erasing most of the year's gains and the Thomson Reuters-Jefferies CRB commodity index .CRB down 1.7 percent to the lowest level since September 2010. Gold rose more than 3 percent on safe-haven buying and U.S. government debt yields fell to record lows. <GOL/> <US/>

Brent July crude tumbled $3.44 to settle at $98.43 a barrel, the weakest close since January 27, 2011, having pushed below $100 for the first time since October. Brent's intraday low of $97.54 was the weakest since February 2011.   Continued...

A worker is silhouetted as he walks past fuel storage tanks at an oil refinery in Melbourne June 21, 2010. REUTERS/Mick Tsikas