Oil falls $5 as rout continues
Oil prices fell 5 percent on Friday, after a 10 percent crash on Thursday, as fears about global economic recovery pushed investors to further unwind commodities positions.
The big drop yesterday has scared the bulls, so now only bears are left, said Thorbjoern Bak Jensen, an analyst at Global Risk Management.
The instinct is to liquidate. Even if you are a bull, you need to have deep pockets to ride this out, said one Singapore-based trader.
Brent crude shed just over $5, recovering to trade at $107.16, $3.64 down, at 4:48 a.m. ET
Brent settled more than $10 lower on Thursday at $110.80 a barrel, the second biggest drop on record. At one point it gave up $12, its biggest fall ever.
U.S. crude futures were $3.62 lower at $96.20 a barrel, up from as low as $95.25 a barrel earlier in the session.
The fall on Thursday was part a global dive over all commodities, driven by factors including a stronger dollar and weak economic data from Europe and the United States.
It was the dollar strength that triggered the sell off and although the euro has then rebounded, it sparked another bout of long position liquidations, said Tony Machacek from Bache Commodities.
The market focused on the release of U.S. jobs data at 8:30 a.m. ET.
U.S. employers probably took on fewer workers in April as high energy prices sapped consumer confidence and led to doubts about the strength of the economic recovery, according to a Reuters survey of economists.
(Additional reporting by Francis Kan; editing by William Hardy)
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