U.S crude oil futures slipped from the highest in three weeks, on Wednesday after an employment report of the ADP private sector showed that U.S added fewer jobs than the forecast last month.
Crude declined as much as 0.8 percent after the ADP employment report showed that U.S. private employers added 38,000 jobs in May compared with downwardly revised figure of 177,000 jobs in April, while markets had expected a gain of 178,00 jobs in May.
David Fyfe, head of the International Energy Agency’s oil industry and markets division said, “The most obvious signs that high prices are having direct impact are coming from North America. The longer that prices stay high, the more likely they’ll drag on underlying economic growth.”
Crude oil futures in July delivery declined 0.73 percent to 116.410 per barrel and Light Sweet Crude delivery dropped by 0.63 percent to $102.670 per barrel.
The Institute of Supply Management (ISM) Manufacturing Index, which measures the amount of manufacturing activity that occurred in the previous month, declined to 53.50 in May compared to 60.40 in April, while analysts expected a reading of 57.50. The key employment index declined to 58.2 in May compared to 62.7 reported in the previous month.
The European benchmark slid 7.3 percent in May and is 60 percent higher in the past year.
An Energy Department report on Thursday may show U.S. crude stockpiles declined 1.8 million barrels last week from 370.9 million. Refiners are expected to raise output by 0.5 percentage point to 86.8 percent of capacity as they ramp up gasoline production for the summer demand season.