May 4, 2012, 6:32 a.m. ET.OIL FUTURES: Crude Falls Ahead Of Nonfarm Payroll Data
LONDON (Dow Jones)--Crude futures fell Friday, continuing into their third straight day of declines as investors eyed U.S. jobs data, which many expect to disappoint when it is released later in the day.
Poor economic data has weighed heavily on oil prices this week, causing Brent to fall to its lowest since February and Nymex to hit a 3-week low.
At 1011 GMT, the front-month June Brent contract on London's ICE futures exchange was $1.36, or 1.2%, lower at $114.72 a barrel.
The front-month June contract on the New York Mercantile Exchange was trading down $1.41, or 1.4%, at $101.13 per barrel.
"There's generally a lack of directional conviction in the market in a low volatility environment which means the price grinds lower on softer economic data," said Harry Tchilinguirian, head of commodity strategy at BNP Paribas in London.
"All this comes against a fundamental background that is seasonally weaker in terms of demand while at the same time OPEC production in the preliminary April surveys continues to move higher," he added.
Speaking at a conference in Paris Thursday, the Organization of the Petroleum Exporting Countries' Secretary General, Abdalla Salem el-Badri said OPEC production in March increased to two million barrels a day above the ceiling agreed by the group in December.
"We are trying to bring the price down," he said, adding that OPEC wanted an oil price of around $100 a barrel in order to avoid damaging demand.
Speaking at the same conference, Maria van der Hoeven, executive director of the International Energy Agency, said oil consumers could still tap into strategic stockpiles if needed. "The oil price has been unable to shrug off this news and rhetoric," said Commerzbank in a note, adding that any more negative news would likely mean further declines.
Elsewhere, some of the risk premium that has supported the oil price so solidly for the past few months seemed to be eroding amid signs that western powers may reach a compromise with Iran over its nuclear program.
The Head of the International Atomic Energy Agency said Friday that the United Nations watchdog is hopeful of reaching concrete results with Iran at its mid-May meeting ahead of separate talks between Iran and the P5+1 group later in the month.
"A deal is there to be done and the next meeting in Istanbul at the end of this month could be a genuine turning point in the confrontation," said PVM in a note.
At 1011 GMT, the ICE's gasoil contract for June delivery was down $14.00, or 1.4%, at $970.25 per metric ton, while Nymex gasoline for June delivery was 236 points, or 0.8%, lower at $3.0264 per gallon.
