Reuters: Market News: UPDATE 8-Oil falls 1 pct on Iran talks, U.S. jobs data

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UPDATE 8-Oil falls 1 pct on Iran talks, U.S. jobs data Apr 9th 2012, 17:35 Mon Apr 9, 2012 1:35pm EDT * Iran nuclear talks set in Istanbul on Saturday * U.S. March jobs report disappoints, pressures oil * Coming up: Fed Chairman Bernanke speaks at 2315 GMT By Robert Gibbons NEW YORK, April 9 (Reuters) - Oil prices fell more than 1 percent o n Monday as revived talks on Iran's nuclear program eased fears of supply disruption and as data showing slower U.S. jobs growth in March sparked concern about demand for fuel. Negotiations between Iran and world powers over Tehran's disputed nuclear program will be held o n A pril 14 in Istanbul. The resumption of talks that collapsed more than a year ago tempered worries about an immediate cut in supply or conflict. After being shut on Friday, oil markets and Wall Street reacted to a U.S. nonfarm payrolls report that showed job growth slowed to 120,000, well below expectations and the smallest increase since October. Brent May crude fell $1.67 to $121.76 a barrel by 1:08 p.m. EDT (1708 GMT), having dropped as low as $121.02 and tested below the 50-day moving average of $121. U.S. May crude lost $1.81 at $101.50 a barrel, below the 100-day moving average of $101.61 and having slipped as low as $100.81. U.S. RBOB gasoline futures slumped, feeling pressure from the weaker-than-expected employment data. Heating oil futures also declined. Brent's premium to U.S. crude strengthened slightly after briefly dipping below $20 a barrel intraday. Lackluster trading volumes were evident with some investors still on holiday. Brent and U.S. crude turnover was less than 300,000 lots traded. Volumes for both crude contracts and for U.S. RBOB gasoline and heating oil sat below 50 percent of their 30-day averages. "If there are some good vibrations from the Iranian talks and they don't immediately break down, the markets will have hopes that the European Union may lighten the sanctions on Iran, at least on the insurance front," said Olivier Jakob from Petromatrix. "At the moment, the sanctions are having a much stronger impact than anticipated, mostly through insurance, which could lead to a full interruption of Iranian oil flows," he added. Tehran's ability to continue exporting oil is being hampered as maritime insurance companies around the world walk away from covering tankers carrying Iranian oil. U.S. EMPLOYMENT GROWTH SLOWS The U.S. nonfarm payrolls report released on Friday tempered recent optimism about the pace of economic expansion and the ability of the United States to bolster growth with the euro zone hampered by debt problems and China facing a slowdown. The S&P 500 hit its lowest point in more than three weeks and the Dow industrials index dipped below its 50-day average for the first time since Dec. 20. ] The slowdown in U.S. jobs growth bolstered expectations that the Federal Reserve could be spurred to ease monetary policy further. "The disappointing jobs growth, while weighing on oil prices, may open the door for quantitative easing 3 and that would be supportive to oil," said Phil Flynn, an analyst at PFGBest Research in Chicago. Investors awaited Federal Reserve Chairman Ben Bernanke's speech, scheduled for 7:15 p.m. EDT (2315 GMT) o n M onday at a conference hosted by the Federal Reserve Bank of Atlanta, for any indications about policy direction. China's annual inflation rate jumped more than expected in March to 3.6 percent, but expectations that a cooling economy has eclipsed inflation as the government's pressing near-term worry were reinforced by surprisingly soft producer prices. Maintenance and refiners' losses despite a recent fuel price hike will cause Chinese oil firms to trim crude oil throughput at major refineries to a 35-month low in April after a large cut in March, a Reuters poll on Mon day showed. IRAN'S DISPUTE OVER NUCLEAR PROGRAM With another attempt at negotiations on tap this weekend, getting Iran to suspend high-level uranium enrichment and close a nuclear facility built deep under a mountain near the holy city of Qom were "near-term priorities" for the United States and its allies, according to a senior U.S. official. An EU embargo on importing Iranian oil is slated for July, while the United States is pressing major importers of Iranian oil in Asia to reduce purchases as well. Link this Share this Digg this Email Reprints

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