Oil Trades Near $80 After Falling on U.S. Unemployment Concern

Nov. 6 (Bloomberg) -- Crude oil traded near $80 a barrel in New York after falling yesterday on speculation that a government report will show that the U.S. unemployment rate climbed last month, depressing demand for energy products.

Oil declined 1 percent yesterday on concern that the Labor Department will say the U.S. unemployment rate rose to a 26-year high in October. Total fuel demand in the four weeks ended Oct. 30 was 4.5 percent lower than the same period a year earlier, a Nov. 4 Energy Department report showed.

The employment figure “will be the granddaddy of them all,” said Jim Ritterbusch, president of Ritterbusch & Associates, a Galena, Illinois, consultant. “There’s just an unwillingness to get in until then.”

Crude oil for December delivery traded at $79.76 a barrel, up 14 cents, in electronic trading on the New York Mercantile Exchange at 10:17 a.m. Sydney time. Yesterday, the contract fell 78 cents to settle at $79.62. Futures are poised for a 3.6 percent gain this week.

An additional 175,000 jobs were probably lost in October pushing unemployment to a 26-year high of 9.9 percent, economists forecast before the Labor Department payrolls report due at 8:30 a.m. today in Washington.

The government report is anticipated to overshadow other economic data released earlier this week as an indicator of fuel demand, according to Carl Larry, president of Oil Outlooks & Opinions LLC, a Houston-based energy adviser.

Refineries operated at 80.6 percent of capacity, down 1.2 percentage points from the previous week and the lowest rate since the week ended April 10, the Energy Department said.

The Standard & Poor’s 500 Index added 1.9 percent in New York yesterday. The Dow Jones Industrial Average increased 2.1 percent and closed above 10,000 for the first time since Oct. 22. The dollar traded at $1.4868 against the euro at 10:05 a.m. in Sydney, from $1.4871 yesterday.

Brent crude oil for December settlement declined 90 cents, or 1.1 percent, to end the session at $77.99 a barrel on the London-based ICE Futures Europe exchange yesterday.