Oil Falls the Most in Three Weeks on Report That U.S. Employers Cut Hiring

[phantom power]

Crude oil dropped the most in three weeks after data showed that U.S. companies added fewer jobs than forecast last month and the expansion of manufacturing slowed, bolstering concern fuel demand growth will weaken.

Oil fell 2.4 percent after ADP Employer Services said employment rose by 38,000 in May, the smallest gain since September. A 175,000 increase was forecast, according to a Bloomberg News survey. The Institute for Supply Management’s factory index decreased to the lowest level since September 2009, the Tempe, Arizona-based group said today.

“We’ve received disappointing economic news all week,” said Peter Beutel, the president of Cameron Hanover Inc., an energy advisory company in New Canaan, Connecticut. “Consumers are fearful about the future, which translates into lower fuel demand. The bottom line is that oil is overpriced given the economic outlook.”

Crude oil for July delivery declined $2.41 to settle at $100.29 a barrel on the New York Mercantile Exchange. It was the biggest single-session drop since May 11. Futures are up 38 percent from a year ago.

http://www.bloomberg.com/news/2011-06-01/oil-fluctuates-on-u-s-jobs-report-european-steps-to-curtail-debt-crisis.html