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West Texas Intermediate crude headed for the biggest weekly drop in six months as U.S. employers hired less than half the number of workers forecast in March, raising concern that economic growth won’t be strong enough to support oil demand.
Prices tumbled for the fourth time in five days after the Labor Department said payrolls climbed by 88,000, the smallest gain in nine months. Economists had expected an advance of 190,000. U.S. inventories increased to a 22-year high in an April 3 Energy Information Administration report as oil production stayed near the most since 1992.
The unemployment rate, derived from a separate survey of households, fell last month to 7.6 percent from 7.7 percent in February, the Labor Department said. The figure, the lowest since December 2008, reflected a 496,000 decline in the size of the labor force. The labor force participation rate fell to 63.3 percent, the lowest since May 1979.
U.S. crude stockpiles expanded by 2.71 million barrels in the week ended March 29 to 388.6 million, the most since 1990, the Energy Information Administration, the Energy Department’s statistical arm, said on April 3. Production was 7.15 million barrels a day.
WTI oil for May delivery dropped 92 cents, or 1 percent, to $92.34 a barrel at 11:46 a.m. on the New York Mercantile Exchange after falling to $91.91, the lowest intraday level since March 21. Prices are down 5 percent this week, heading for the biggest weekly loss since Sept. 21.
Brent crude for May settlement declined $1.68, or 1.6 percent, to $104.66 a barrel on the London-based ICE Futures Europe exchange.
Brent’s premium to WTI narrowed to as little as $12.09, the least since July. Brent has slumped 5.8 percent this year, while WTI is up 0.6 percent.