Oil falls 4% as US job losses mount

Oil prices fell over four per cent yesterday after news of more job losses in the United States heightened the prospect for still weaker demand in the world's biggest oil consumer.

Nearly 600,000 jobs were slashed in the United States last month, the most severe cut since December 1974. US light crude for March delivery fell $1.71 to $39.46 a barrel by 12.56 p.m. ET (1756 GMT). London Brent, which usually trades below its US counterpart, fell $1.28 cents to $45.18.

US crude is trading well below Brent as inventories in Cushing, Oklahoma - the delivery point for the US crude contract - are at record levels.

The economic slowdown has curbed demand for fuel around the world, causing prices to fall over $100 from a peak near $150 last July.

"Crude has tested below $40 on the jobs losses but the fact that crude has not gone down much deeper is due to the fact that the stock market has held higher."