Oil falls drops below $40 on dismal jobs report

Recent Outbreaks Posted on

Oil prices dropped below $40 Friday as the government reported U.S. employers slashed more than a half million jobs last month, the most in 35 years.

Light, sweet crude for March delivery fell $1.61 cents to $39.56 a barrel on the New York Mercantile Exchange.

The Labor Department reported 598,000 jobs were lost in January. The unemployment rate rose to 7.6 percent, the highest since 1992.

Oil traders see layoffs as an instant drag on oil demand. People have less need for gasoline when they no longer have a daily commute. They also cut their spending for toys, nonstick pans, raincoats and millions of other products that are made with petroleum.

"The economy's ugly. We know it's ugly," analyst and trader Stephen Schork said. For a sustained rebound in oil prices, "you have to stop seeing the economy contract. You have to stop seeing people get laid off. We probably won't see much of that this year."

The number of people remaining on the unemployment compensation rolls increased slightly to nearly 4.8 million, the most since records began in 1967.

Amid the gloom, some companies are performing above analysts' beaten-down expectations. Wal-Mart's sales beat Wall Street's forecasts and Macy's department store, which this week said it would slash 7,000 jobs, raised its fourth-quarter and full-year forecasts.

Investors are also watching for possible further production cuts by the Organization of Petroleum Exporting Countries, which has already promised to reduce output by 4.2 million barrels since September.

Legal News Media

Legal News is the top headline legal news provider for lawyers and legalprofessionals. Read law articles and breaking news from law firm's across the United States to get the latest updates. We reserve the right, at our discretion, to change, modify, add, or remove portions of the site at any time. Your This site is solely for your personal use. You are, of course, welcome to print or otherwise copy material from this site for your personal use. However, you may not distribute, exchange, modify, sell or transmit anything you copy from this Site, including but not limited to any text, images, audio and video, for any business, commercial or public purpose. Any unauthorized use of the text, images, audio and video may violate copyright laws, trademark laws, the laws of privacy and publicity and civil and criminal statutes.


American Bar Association – Start and Run a Law Firm

NewYorkStateBar.com – Starting a Law Firm

Lawyer Website Designs