Oil prices drop to below $76 on jobs data

November 8, 2009, 1:25pm

NEW YORK, Nov. 8, (AFP) — Oil prices tumbled Friday as official data showed unemployment hitting a fresh 26-year high in the United States, raising fresh doubts about the economic recovery and energy demand.

Prices had risen back above 80 dollars a barrel on Friday ahead of the jobless numbers.

New York's main contract, light sweet crude for delivery in
December dropped 2.12 dollars to close at 75.87 dollars a barrel, a drop of 2.75 percent drop that wiped out gains from earlier in the week.

Brent North Sea crude for December delivery shed 2.12 to settle at 75.87 dollars in London trade.

The US unemployment rate jumped to 10.2 percent in October as 190,000 jobs were shed, the government said Friday in data highlighting ongoing struggles of an economy emerging from recession.

The Labor Department report, seen as one of the best indicators of economic momentum, showed a rise in the jobless rate, up from 9.8 percent in September, to the highest since 1983. But the number of jobs lost narrowed to the lowest level in more than one year.

Analysts said the weaker-than-expected labor report raised fresh doubts about the sustainability of the US economic recovery, and energy demand.

''The 10.2 percent unemployment rate is somewhat startling, the worst in 26-1/2 years,'' said Mike Fitzpatrick at MF Global.

''Naturally, this data will not provide much intellectual substance to an argument that concludes the economy is recovering, as the recent (growth) data suggests; nor for that matter, for energy demand growth,'' he added.