The price of oil extended losses below $100 a barrel Tuesday, Oct 22, ahead of the U.S. employment report for September, the Associated Press reports.
Benchmark U.S. crude for November delivery was down 33 cents at $98.89 a barrel at midafternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract, which expires Tuesday, dropped $1.56 to $99.22 the day before. The December contract was down 34 cents at $99.34 a barrel.
A jump in U.S. crude supplies weighed on the oil price. The government said Monday, in a report delayed five days due to the government shutdown, that U.S. crude supplies rose by 4 million barrels in the week ended Oct. 11.
The Schork Report estimated that U.S. commercial crude oil stocks are at the third highest level for October since 1930 and 13 percent above the normal range over the previous decade.
The September employment report, also delayed because of the shutdown, is due for release later Tuesday and will provide a new cue for energy trading.
U.S. employers are forecast to have added 180,000 jobs, up from 169,000 in August. The unemployment rate is expected to remain at 7.3 percent, which will support arguments in favor of the Federal Reserve continuing its super easy monetary policy.
Brent crude, the international benchmark, was up 22 cents to $109.86 on the ICE futures exchange in London.
Vanessa Tan, investment analyst at Phillip Futures in Singapore, said the seasonal maintenance of refineries coupled with the movement of pipeline flows around the Cushing, Oklahoma, delivery point for WTI futures helped drive the stockpiles increase.
"This surplus of oil supplies in the near term helped to weigh on prices but some support came from expectations that the U.S. Fed would not reduce asset purchases as its quantitative easing program would support the demand of oil," she said in a note, according to AFP.
