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Oil prices slip before payrolls figures

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(Globalpost/GlobalPost)

Global oil prices fell further on Friday as traders awaited key data amid ongoing worries about the US economy and a supply glut in the world's top crude consuming nation.

Brent North Sea crude for delivery in May dropped 37 cents to $105.97 per barrel shortly after midday in London.

New York's main contract, West Texas Intermediate (WTI) light sweet crude for May, gave back 36 cents to $92.90 a barrel.

Crude futures had slumped on Thursday following an unexpected jump in US unemployment claims, and after aggressive stimulus measures from the Bank of Japan.

Brent sank to a five-month low at $105.29, while New York crude touched a two-week trough at $92.15.

Later on Friday, all eyes will be on the non-farm payrolls (NFP) report which is scheduled for release at 1330 (1230 GMT).

"Because many market players attribute this week's slide in the price of crude oil to the weaker US data of late, considerable attention is likely to be paid to today's labour market figures," said Commerzbank analyst Carsten Fritsch.

"Expectations have already been noticeably scaled down ahead of their publication, so any positive surprise would lend support to the oil prices."

The NFP data is crucial for international financial markets because it provides vital clues on the health of the world's biggest economy.

The US Labor Department will release its jobs and unemployment report later Friday. Most analysts have pencilled in growth of 192,000 in March, down from a February spike of 236,000.

The unemployment rate was expected to stay at 7.7 percent for a second straight month.

On Thursday, official data showed new claims for unemployment benefits totalled 385,000 in the week ending March 30, up 28,000 from the prior week. Analysts had expected claims to fall.

Crude oil prices were also under pressure this week on the back of stubborn concerns over plentiful US supplies.

Prices had dived by about $3 a barrel on Wednesday after the US government's Energy Information Administration revealed that US crude reserves rose 2.7 million barrels to 388.6 million barrels.

That was almost double market expectations for an increase of 1.5 million barrels.

The news also sent total stocks to the highest level since July 1990.

Surging US inventories signal weaker demand and tends to put downward pressure on prices.

A pipeline closure ExxonMobil's Pegasus pipeline in Arkansas, a 95,000 barrel-a-day line, has also sparked fears of a build-up of stockpiles at the Cushing, Oklahoma, which is a key delivery point.

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http://www.globalpost.com/dispatch/news/afp/130405/oil-prices-slip-payrolls-figures