Oil prices move ever closer to yearly lows

NEW YORK, Aug. 7 (UPI) -- Oversupply fears continued to drag on crude oil prices, which dipped into negative territory Friday after the release of U.S. labor figures for July.

Brent crude oil prices moved ever closer to the low point for 2015, losing 1 percent in early Friday trading at $49.01 per barrel. Brent traded at $45.13 on Jan. 13 and rallied to $66.33 in mid-May.

West Texas Intermediate, the U.S. benchmark price, traded down seven-tenths of a percent to $44.35 per barrel early in the Friday session. WTI hit $44.08 on Jan. 29 and moved to $61.30 by June 2.

Crude oil prices are down substantially since July amid concerns about the health of the global economy. Two crashes on the Chinese stock market in July and lingering debt issues with Greece helped drag on crude oil prices last month.

The Labor Department said Thursday the advance figure for seasonally adjusted new claims for unemployment insurance for the week ending Aug. 1 was up by 3,000.

On Friday, the Labor Department said the unemployment rate held steady, with a national average rate at 5.3 percent. Year-on-year, unemployment is down 0.9 percent.

Low crude oil prices are a boost for consumer spending, as U.S. commuters have more disposable income because of fuel savings. For those in the energy sector, market dynamics are a source of stress. Labor figures from Thursday show unemployment in Texas, the No. 1 oil producer in the nation, increased 2.5 percent for the week ending Aug. 1. Unemployment claims in North Dakota, the No. 2 producer, increased from 420 to 683 for the week ending Aug. 1.

The Labor Department said Friday non-farm payrolls increased by 215,000 in July, lower than the 12-month average of 246,000. Job gains last month came primarily from retail trade and healthcare services. Motor vehicle and parts dealers added 13,000 jobs.

Mining employment, meanwhile, shed about 5,000 jobs in July. The industry has lost 78,000 jobs since December.

Oil services company Baker Hughes, however, showed a modest increase in the exploration and production side of the energy sector in July, moving against a negative tide brought on by lower crude oil prices. More rig deployments could lead to more supplies coming out of U.S. shale basins in an oversupplied market.

The Federal Reserve is monitoring employment reports as it considers its first interest rate increase in years. The board last month said it was looking from "some further improvement" in the U.S. labor market.