BLBG:Crude Trades Near One-Week High as Slower Hiring Curbs Optimism
Oil traded near the highest close this week as speculation that jobs growth in the U.S. is slowing countered optimism that a European Central Bank plan will address the region’s debt crisis.
Crude was little changed after rising as much as 0.6 percent. Payrolls in the U.S., the world’s biggest consumer of crude, probably rose at a reduced pace in August, economists said before a Labor Department report today. ECB President Mario Draghi announced plans yesterday to reduce interest rates for struggling nations in the euro area.
“The move by Draghi has given an instant boost to risk appetite,” Thina Saltvedt, an analyst at Nordea Bank AB (NDA) who predicts prices will remain at current levels this month, said by phone from Oslo. “But we need to see more positive news about economic growth in the U.S. and China.”
Crude for October delivery was at $95.83 a barrel, up 30 cents, in electronic trading on the New York Mercantile Exchange at 12:14 p.m. London time. The contract climbed 17 cents yesterday to $95.53, the highest close since Aug. 31. Futures are down 0.7 percent this week, the first weekly decline in six weeks, and have lost 3 percent in 2012.
Brent oil for October settlement on the London-based ICE Futures Europe exchange was at $113.97 a barrel, up 49 cents. The European benchmark crude was at an $18.10 premium to West Texas Intermediate, from $17.96 yesterday.
Moving Average
Draghi said yesterday that ECB policy makers agreed on an unlimited bond-purchase program. Spanish 10-year bonds rose, pushing the yield below 6 percent.
WTI has technical resistance along its 200-day moving average, at $96.62 a barrel, according to data compiled by Bloomberg. Futures have halted their advance near that level the past week. Sell orders tend to be clustered close to chart- resistance levels.
Oil also settled below an upward-sloping trend channel for a second day yesterday, confirming a breach of technical support. The channel started from $77.28 a barrel, the 2012 intraday low on June 28, and marks where futures rebounded in early August.
U.S. employment probably rose by 130,000 in August after gaining 163,000 in July, according to a Bloomberg survey before the Labor Department report today.
Oil advanced yesterday after an Energy Department report showed U.S. crude stockpiles fell 7.4 million barrels last week to the lowest level in five months.
Gasoline inventories dropped 2.3 million barrels, less than a 3 million median estimate of 12 analysts surveyed by Bloomberg News. Distillate supplies, a category that includes heating oil and diesel, gained 993,000 barrels, compared with projected decline of 1.55 million.
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net
