Forexpros – Crude oil futures slipped lower on Monday, paring back some of Friday’s gains which came in the wake of stronger-than-forecast U.S. jobs data, as renewed concerns over the situation in the euro zone curbed risk appetite.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at USD91.14 a barrel during European morning trade, down 0.28%.
Risk appetite was hit by renewed concerns that Spain may require a full scale bailout as Spanish bond yields remained close to critical levels.
Overall market sentiment remained supported after the European Central Bank indicated Thursday that it may restart its bond buying program, to help lower Spanish and Italian borrowing costs.
But investors remained wary amid concerns over how effective the ECB’s new bond buying program would be, in the light of differences from the bank’s existing scheme.
Oil prices rallied on Friday, jumping more than 4% to a session high of USD91.70, after data showed that the U.S. economy added 163,000 jobs in July, the biggest increase since February and outstripping expectations for an increase of 100,000.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
However, the U.S. unemployment rate unexpectedly ticked up to 8.3%, from 8.2% in the preceding month, keeping alive speculation over the possibility of further monetary stimulus from the Federal Reserve.
Market participants were looking ahead to a speech by Federal Reserve Chairman Ben Bernanke later in the day.
Oil prices remained supported by ongoing tensions in the Middle East, as intense fighting continued in Syria and threatened to spill over into neighboring countries, including major oil producers.
On the London based ICE Futures Exchange, Brent oil futures for September delivery were down 0.38% to trade at USD108.53 a barrel, with the spread between the Brent and crude contracts standing at USD17.39.
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