(The Canadian Press) Oil prices fell Monday after a big jump in the previous trading session that was sparked by expectations the Fed might delay stimulus reduction.
Benchmark U.S. oil for February delivery was down 36 cents to US$92.36 a barrel at 3: 25 a.m. ET in electronic trading on the New York Mercantile Exchange. The contract surged $1.06 to settle at $92.72 a barrel on Friday.
The U.S. added just 74,000 thousand jobs in December, way below market expectations of 196,000 jobs. The unemployment rate fell from 7.0% to 6.7%, but it was mostly because of a drop in the number of people seeking work.
The weaker hiring led to speculation the Fed would halt or slow plans to reduce its bond purchasing program. The stimulus, which has kept interest rates low, has helped underpin oil prices by weakening the dollar and also by attracting investors to commodities in search of higher profits. A weaker dollar usually boosts oil prices by making crude cheaper for traders using other currencies.
But some analysts said the jobs number was a fluke due partly to bitterly cold weather, following weeks of data showing the U.S. economy improving. As such, the Fed's plan to wind down its economic stimulus is unlikely to change.
The Fed said in December it would start cutting back its stimulus by $10 billion a month, but further cuts would depend on how many new jobs were added in coming months.
Brent crude, used to set prices for international varieties of crude, eased 18 cents at $106.43 a barrel on the ICE exchange in London.