Crude oil will likely be range-bound as Brent crude fell after the North Sea pipeline was restored and WTI crude gain on bullish employment data. Brent crude dropped to $110.77 a barrel, while NYMEX crude quoted at $91.34. The price of oil eased slightly Friday, reflecting caution as investors wait for the latest U.S. employment figures. Oil pushed higher by the release of data showing a drop in applications for unemployment benefits in the U.S.
The U.S. Commerce Department will release jobs data for February. Analysts expect the report to show that employers in the U.S., the biggest consumer of oil and petroleum products, added 152,000 jobs last month. The jump in US oil prices came after a government report Thursday that showed claims for US unemployment benefits declined by 7,000 for the week ending March 2. The report on jobless benefits followed a report Wednesday from payroll processor Automatic Data Processing that showed that the US private-sector added 198,000 jobs in February, more than many analysts expected.
In the forex market, the euro rose as high as $1.3117 after the European Central Bank held eurozone interest rates at a record low 0.75 percent, in line with market expectations. It later pulled back slightly to stand at $1.3094. The weaker greenback makes dollar-denominated crude cheaper for buyers using stronger currencies, and this tends to stimulate oil demand and prices. Crude oil prices found some direction and climbed higher on Thursday as interest rates remained unchanged, as widely expected.
Concerns were, meanwhile, mounting yesterday that the “sequester” federal spending cuts expected to come into effect will cause a spike in layoffs by government contractors and temporary government employees. Federal Reserve Chairman Ben Bernanke told Congress this week that unemployment remains the biggest challenge to the US economy. The oil market had fallen on Wednesday after the US Department of Energy revealed that American crude stockpiles surged by more than eight times the expected amount, indicating weak demand in the world’s top consumer.
The EIA had announced that crude reserves soared by 3.8 million barrels in the week ending March 1. That was far more than market expectations for a modest gain of 500,000 barrels, according to analysts polled by Dow Jones Newswires.
Data showed that China imported 20.78 million tons of crude oil in February, down 17.4 percent from 25.15 million tons in the previous month, according to data from China’s General Administration of Customs. Imports of oil products fell 13.6 percent to 3.38 million tons while exports of oil products fell 9.5 percent to 2.20 million tons. A release today showed that China’s trade exports surged. Trade data is widely considered one of the most reliable Chinese economic indicators. But analysts have warned against giving Jan-Feb data too much weight, since it will be distorted by the Chinese New Year holiday.
Data showed that the trade balance surged to 15.2billion dollar against an expectation of a decline of 6.9 billion.
Market focus will remain on the US nonfarm payroll report due early in the North American session.
