Gasoline slid below $3 a gallon as slower-than-estimated U.S. job growth and shrinking service and manufacturing sectors in Europe raised concern that fuel demand will decline.
Futures sank to an 11-week low and crossed a key technical indicator as U.S. employers added fewer workers than forecast in April and the jobless rate fell as people left the labor force. Euro-region services and manufacturing output contracted more than initially estimated in April, indicating a deepening economic slump.
“It’s the combination of weak economic data across the globe and the realization the market is well supplied,” said Phil Flynn, vice president of research at PFGBest in Chicago.
Gasoline for June delivery fell 8.08 cents, or 2.7 percent, to $2.9692 a gallon at 11:15 a.m. on the New York Mercantile Exchange. Prices touched $2.9407, the lowest intra-day level since Feb. 8 and biggest decline since Dec. 14. Gasoline has fallen every day this week, losing 7.4 percent.
The front-month contract fell below the 100-day moving average for the first time since Jan. 3.
“That has been considered the big trend changer when it falls below the 100-day,” said Michael Smith, president of T&K Futures & Options in Port Saint Lucie, Florida. “Gasoline has peaked for the year and will probably come back down to $2.50 levels.”