Oil Spooked Again by Weak Economy Data

Oil fell towards $91 a barrel on Friday after weak U.S. jobs data triggered fresh concerns of a recession in the world's top oil consumer, despite support from an OPEC decision not to raise oil production.
TradingEconomics.com, Reuters 2/1/2008 7:01:15 AM

U.S. employers unexpectedly cut 17,000 non-farm jobs last month, the first time in nearly 4-1/2 years, providing further evidence of a slowing economy.

The news hit U.S. and European stocks and sent the U.S. dollar sharply lower, dragging with them oil prices which had rallied after OPEC's decision to keep output levels steady and on rising stock markets.

U.S. light crude for March delivery lost 65 cents to $91.10 a barrel by 1400 GMT, off highs of $92.12. London Brent crude was 67 cents down at $91.54.

OPEC ministers meeting in Vienna once again rejected calls from consumer countries to pump more oil amid worries that high fuel prices are adding to recessionary pressures in the West.

The decision was widely expected, with a chorus of ministers reiterating ahead of the meeting that the oil market was well supplied, and a small group -- Iran and Venezuela -- even calling for a production cut at their next gathering on March 5.

OPEC's decision comes as concerns mount the United States is headed for a recession after a slew of recent economic data pointed to a deteriorating economy. A major U.S. recession could impact the world economy and with it oil demand and prices.

A gloomy outlook for the U.S. economy has sent many speculative investors, who helped propel oil's rally above $100 a barrel last month, into safer havens.