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Oil prices slip before US payrolls data

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(Globalpost/GlobalPost)

World oil prices fell on Friday as the market awaited the release of US payrolls data amid lingering concerns over a prolonged budget stalemate in Washington, analysts said.

Brent North Sea crude for delivery in April dropped 72 cents to $110.43 a barrel in London deals.

New York's main contract, West Texas Intermediate (WTI) light sweet crude for April, shed 10 cents to $91.46 a barrel.

"People are waiting for new economic data... in the United States," said Tony Nunan, risk manager at Mitsubishi Corp in Tokyo.

"Prices are likely to fall if the data is disappointing as the general market is weak," he told AFP.

The health of the world's biggest economy is crucial for the oil market because the United States is also the world's biggest crude consuming nation.

Prices have meanwhile won some support this week from uncertainty following the death of Hugo Chavez, the president of major Latin American crude producer Venezuela.

Chavez lost his battle with cancer on Tuesday -- aged 58 -- plunging the nation into an uncertain future.

Markets have in recent days also reacted to ongoing political limbo in debt-ridden Italy, where last week's inconclusive elections have fanned concerns about a return to the eurozone debt crisis.

"The significance of events in Venezuela may likely to be felt over the longer term although the change in leadership could generate some uncertainty in the short term," said analyst Damien Cox at consultancy EnergyQuote in London.

"However, in Italy, one of the largest economies in the eurozone, the uncertainty surrounding the change of leadership is an equally interesting development given an inconclusive election result.

"It remains to be seen what sort of government emerges there and what the implications are for the eurozone of any new priorities it may have," he added.

Venezuela has the world's largest proven oil reserves, according to the Organization of the Petroleum Exporting Countries, but it lags behind OPEC kingpin and peer Saudi Arabia in terms of the amount of crude it can actually bring to the surface.

Oil production meanwhile accounts for 90 percent of the country's hard-currency revenue.

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http://www.globalpost.com/dispatch/news/afp/130308/oil-prices-slip-us-payrolls-data