The price of oil extended losses below $99 a barrel Tuesday ahead of the U.S. employment report for September.
By early afternoon in Europe, benchmark U.S. crude for November delivery was down 54 cents at $98.68 a barrel in electronic trading on the New York Mercantile Exchange. The contract, which expires Tuesday, dropped $1.56 to $99.22 the day before. The much more heavily traded December contract was down 33 cents at $99.35 a barrel.
A jump in U.S. crude supplies weighed on the oil price. The government said Monday, in a report delayed five days due to the government shutdown, that U.S. crude supplies rose by 4 million barrels in the week ended Oct. 11.
"This was the fourth consecutive weekly rise, during which period crude oil stocks grew by 18.9 million barrels, thereby reversing a good half of the destocking seen over the summer months," said a report from analysts at Commerzbank in Frankfurt. "The inventory build is due to still subdued rates of crude oil processing because U.S. refineries are currently carrying out maintenance work."
Analysts at The Schork Report estimated that U.S. commercial crude oil stocks are at the third highest level for October since 1930 and 13 percent above the normal range over the previous decade. Looking ahead, investors will monitor the September employment report, which was also delayed because of the shutdown. It is due for release later Tuesday and will provide a new cue for energy trading.
U.S. employers are forecast to have added 180,000 jobs, up from 169,000 in August. The unemployment rate is expected to remain at 7.3 percent, which will support arguments in favor of the Federal Reserve continuing its super easy monetary policy.
Brent crude, the international benchmark, was up 59 cents to $110.23 on the ICE Futures exchange in London. In other energy futures trading on Nymex: — Wholesale gasoline rose 1.24 cents to $2.6525 a gallon.
— Natural gas dropped 1.9 cents to $3.649 per 1,000 cubic feet. — Heating oil gained 1.44 cents to $3.0216 a gallon.