Oil price drops below $100 a barrel

December 1, 2011 - 12:40 PM

NEW YORK (AP) — Oil prices are falling after a four-day surge as traders await a key U.S. jobs report.

Benchmark crude dropped by 96 to $99.40 per barrel in New York. Brent crude lost $1.66 at $108.32 in London.

Prices had risen every trading day since Thanksgiving. They were boosted by tension over Iran's nuclear program and an effort by the Fed and central banks of other nations to increase the flow of dollars to foreign banks.

Now traders are awaiting the November unemployment report, to be released Friday by the Labor Department. High unemployment has been a drag on the economy and has kept demand for oil and gas weak.

"Everything's on hold right now," PFGBest analyst and oil trader Phil Flynn said. "We're a little worried about what those jobs numbers will be tomorrow."

Government data released Thursday suggested that the U.S. jobs market remains weak. The number of people who applied for unemployment benefits rose above 400,000 last week for the first time in a month, the Labor Department said. Applications would need to fall below 375,000 for an extended period to cut into the nation's 9 percent unemployment rate.

Separately, other reports gave a better reading on the economy. Manufacturing activity in the U.S. rose in November to a seven-month high. Auto makers including Chrysler, General Motors and Ford reported big increases in sales last month. And builders spent more in October on homes, offices and shopping centers, though construction spending remains anemic compared with previous years.

At the pump, retail gasoline prices slipped by less than a penny to $3.292 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is about 69 cents cheaper than it was at its peak this year, near $4 per gallon, but it's still almost 43 cents higher than at the same time last year.

In other energy trading, natural gas prices jumped 7 cents, or 2 percent, to $3.62 per 1,000 cubic feet, after the government reported an unexpected decline in U.S. supplies last week.

Heating oil fell by 5 cents to $2.97 per gallon, and gasoline futures fell 1.86 cents to $2.5398 per gallon.