DTN Oil

WASHINGTON (DTN) -- Nearby delivery New York Mercantile Exchange oil futures and Brent crude on the Intercontinental Exchange fell sharply in afternoon trade Friday, with the U.S. crude benchmark sliding to a nearly four-week low settlement. The losses came as market participants assessed the prospects for a new stimulus package in the United States against the coronavirus prognosis of U.S. President Donald Trump and a disappointing jobs report for September, showing recovery in the labor market continues to lag behind the overall economy.

White House Chief of Staff Mark Meadows said Friday Trump was having "mild" symptoms after testing positive for the virus and that he and Melania are in "good spirits."

The U.S. Department of Labor reported Friday employers added 661,000 new jobs in September, bearish against expectations for an 850,000 increase, with the number of permanent job losses increasing by 345,000 to 3.8 million on the month. Overall, the report was disappointing, but the headline unemployment rate fell more than expected to 7.9% from 8.4% in August.

Slowing employment growth is expected to continue, with several major employers, including airlines, theme parks and restaurants, announcing layoffs in the past few days, heightening concern that a delayed relief package from Congress would accelerate job losses and economic growth in the fourth quarter. House Speaker Nancy Pelosi urged airlines Friday to delay furloughing employees, saying an agreement for additional federal government relief amid the pandemic is "imminent." Yet, she said there remain outstanding differences between House Democrats and Republicans in the Senate on the relief package.

Apart from a slowing recovery in the labor market, income inequality in the post-lockdown economy is growing. Consumer sentiment in September jumped to the highest in six months to 80.4, suggesting consumers feel more optimistic about their economic prospects. However, the recent gains are mostly attributed to upper-income households while lower-income households face continued income and job losses.

Trump's diagnosis with the coronavirus was the chief agitator for Friday's losses in oil and equities, although steep early declines in U.S. equities were pared late session, with Dow Jones Industrials late Friday down 134 points.

On the session, November West Texas Intermediate futures shed $1.67 to settle at $37.05 per barrel (bbl), with the December Brent contract down $1.66 to $39.27 per bbl. November ULSD futures retreated 4 cents to $1.0850 gallon, and November RBOB futures slid 2.89 cents to $1.1235 gallon.

Liubov Georges can be reached at liubov.georges@dtn.com

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