Crude oil futures settle at lowest since January; gasoline hits new 52-week low

Crude oil futures fall for a fourth straight session on Wednesday, as a downward revision in U.S. payrolls outweighed upside from a bigger than expected draw in U.S. crude oil inventories.

The U.S. added 818K fewer jobs than previously reported from April 2023 to March 2024, as the Labor Department’s revised estimate of employment growth showed the economy gained ~2.1M jobs in the period instead of the previously reported increase of 2.9M jobs.

“The market is now going from pricing in a stronger economy to a potential hard landing, which is why oil prices are reluctant to move higher,” Price Future Group analyst Phil Flynn said, according to Reuters.

“We already have growing concerns that the Chinese economy is going to cool with the weather and pull significant demand out of the global petroleum market, and much of Europe is in question… so the U.S. data just added to the list,” Tradition Energy research director Gary Cunningham told MarketWatch.

The revised jobs data offset support from a larger than expected drop in U.S. oil inventories, which fell by 4.6M barrels to 426M barrels last week, along with declines in gasoline and distillate stocks, the Energy Information Administration reported.

“Prioritization of the dismal employment numbers over a seemingly bullish EIA report tended to highlight the fragility of the [oil] complex,” Ritterbusch said, according to Dow Jones.

Front-month Nymex crude (CL1:COM) for October delivery finished -1.7% to $71.93/bbl, its lowest settlement since January 10, and October Brent crude (CO1:COM) ended -1.5% to $76.05/bbl, its lowest close since January 2.

U.S. natural gas (NG1:COM) also fell, with the front-month September Nymex contract closing -0.9% to $2.177/MMBtu.

ETFs: (NYSEARCA:USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (USOI), (UGA), (UNG), (BOIL), (KOLD), (UNL), (FCG)

Gasoline futures (XB1:COM) fell to their lowest settlement since May 3, 2023, with the front-month Nymex contract for September delivery finishing -0.6% to $2.2497/gal.

The result for U.S. motorists is pump prices that fell Wednesday to a five-month low $3.398/gal, according to AAA, as the national average has declined 24 of the last 26 days.

The trend may provide a timely election boost for Vice President Kamala Harris, as pump prices are one of the most visible measures of inflation for voters.