Oil deepens losses as US labor market fears resurface; WTI crude below $72

Oil drilling rigs

Oil deepened losses today, Aug. 21, after renewed concerns about the weakness of the US labor market, and despite a decline in US crude inventories by more than expected during the week ended Aug. 16.

Brent crude futures for October delivery fell 1.5%, or $1.15, to $76.05 a barrel, after touching $75.65.

WTI crude for October delivery (most active) dropped 1.7%, or $1.24, to record $71.93 per barrel, after touching $71.46.

In a downward revision to nonfarm payrolls data, the US Labor Department said the number of jobs added by the economy during the year ended March 31 was about 818,000 fewer than reflected in monthly reports during that period.

US Energy Information Administration data revealed that commercial oil inventories fell by 4.6 million barrels last week, compared to expectations of a decline of about two million barrels, with refinery inputs rising by 222,000 barrels per day from the previous week's average.

However, the weekly report indicated that US crude production fell by about 100,000 barrels to 13.3 million barrels per day, with demand for oil (measured by crude and its derivatives supplied to the market) falling by about 101,000 barrels per day to 20.4 million barrels per day.