Oil prices slide as employment numbers dip

NEW YORK -- Energy prices fell for a second consecutive day Friday as the U.S. reported a sharp plunge in jobs.

Crude and gasoline price have risen sharply for more than a week with economic data suggesting that manufacturing activity has accelerated across the globe.

Yet if the job picture remains gloomy, it is unlikely that higher energy prices can be sustained.

By midmorning, benchmark crude fell 36 cents to $82.30 per barrel on the New York Mercantile Exchange after closing down 52 cents on Thursday.

U.S. companies shed 85,000 jobs last month, more than expected, and the numbers would have been worse if more people had been looking for work. Many have left the labor force because they can't find work.

On Friday, UPS, the world's largest package delivery company, said it would cut 1,800 management and administrative jobs.

Nearly 15.3 million people in the U.S. are unemployed, with an increase of 3.9 million people during 2009.

That has slashed demand for gasoline and in many households where one or two parents have lost jobs, people are putting on another sweater rather than turning up the heat.

Even with nasty winter storms raking the country, the Energy Information Administration reported Wednesday that heating oil supplies had fallen by a paltry 300,000 barrels.

Still, gasoline prices have risen steadily for weeks and that isn't making it any easier for consumers. Oil prices have risen over the past two weeks on the anticipation that a healing economy will increase demand and gasoline prices have tagged along.

The U.S. average price for a gallon of gasoline this week raced by the top price for all of last year and continued to rise overnight.

A gallon rose almost 2 cents to $2.725 (72 cents a liter) to end the work week, according to AAA, Wright Express and Oil Price Information Service.

In other Nymex trading in February contracts, heating oil fell less than a penny to $2.1776 a gallon and gasoline also lost less than a cent to $2.1326 a gallon. Natural gas futures fell 12 cents to $5.685 per 1,000 cubic feet.

In London, Brent crude for February delivery fell 45 cents to $81.06 a barrel on the ICE Futures exchange.