Job losses to drag oil, gas prices down

By Johnny Jackson


Energy industry officials say they expect July crude oil prices to follow June employment numbers.

"We're going to see economic reports drive the price of crude again as we did in the beginning of the year," said Jessica Brady, spokeswoman for AAA Auto Club South.

One-hundred, twenty-five thousand (125,000) jobs were lost in June, according to the U.S. Department of Labor.

"The job losses are largely a result of 225,000 temporary census workers ending their service," said U.S. Secretary of Labor Hilda Solis, in a statement released on July 2.

Solis noted that the U.S. has seen some steady growth in a combined 600,000 private-sector jobs created, so far, this year.

"While this steady private-sector-job growth is encouraging," Solis said, "the number of Americans without a job reminds us we need to continue working to create jobs and grow the economy."

Brady said last month's overall job losses were indicative of an economy which is improving at a much slower pace than expected. China, too, shows modest gains in manufacturing.

Crude oil prices, she said, fell on the New York Mercantile Exchange (NYMEX) by $6.72 on July 2, to $72.14 a barrel.

"This is atypical for this time of year, since we usually see retail gas prices hit their peak in July," said Brady. "Instead, consumers will see gas prices drop this week and the national average continue to fluctuate between $2.65 and $2.75."

Brady said consumers paid lower retail gasoline prices this holiday weekend than many expected, and can expect to see the lower prices continue throughout the next couple of weeks, with the exception of unforeseen events, such as tropical storms and hurricanes.

"It was projected that the average for the year would be $2.85 per gallon, for the year," she continued. "But we may not even see a $3 [per gallon] average, this summer."

The AAA Fuel Gauge Report revealed that gas prices have already begun to turn around. The average gallon of regular unleaded gas held steady in metro Atlanta, at $2.63, on Monday and Tuesday -- down from $2.68 per gallon. Likewise, the national average for regular unleaded gas prices was down to $2.74 per gallon on Monday and Tuesday, from $2.75 the week prior.

"We don't see gasoline prices [on average, nationally] hitting $3 per gallon until the spring of next year," added Neil Gamson, an economist with the U.S. Energy Information Administration. "That's assuming the crude price patterns hold. If crude oil prices continue to drop, they could be lower," Gamson said. "But spot prices have been pretty volatile. Any kind of economic news could set the market."