IV:Crude oil futures rebound; Brent-WTI spread at 9-month low
Investing.com - Crude oil futures regained strength on Monday, moving further off the previous session’s two-week low, but gains were limited after weaker-than-forecast U.S. nonfarm payrolls report for March fuelled fears that the economic recovery is losing momentum, reducing hopes for higher oil demand.
On the New York Mercantile Exchange, light sweet crude futures for delivery in May traded at USD93.33 a barrel during European morning trade, up 0.7% on the day.
New York-traded oil prices rose by as much as 0.8% earlier in the session to hit a daily high of USD93.39 a barrel.
Nymex oil prices fell to a two-week low of USD91.97 on Friday, after the U.S. Department of Labor said the economy added 88,000 jobs last month, the smallest increase since last June and far below forecasts for an increase of 200,000.
The data also showed that the unemployment rate ticked down to 7.6% from 7.7% in February, but the decline stemmed from more people dropping out of the labor force. The labor participation rate fell to 63.3%, the lowest level since 1979.
Oil traders have long been taking cues from the monthly jobs report, the most-closely followed indicator of U.S. employment, because it offers insight into the economic health of the world's biggest crude oil consumer.
A deteriorating economy is generally correlated with decreased demand for oil and fuel products like gasoline.
Oil prices came under heavy selling pressure last week, losing 4.3% after the U.S. Energy Information Administration said crude supplies rose to the highest level since 1990, while oil production hit the highest level since 1992.
The U.S. is the world’s biggest oil consuming country, responsible for almost 22% of global oil demand.
Oil traders are now looking ahead to a flurry of Chinese economic reports due later in the week to gauge the strength of the world’s second largest economy and the prospect of future oil demand.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for May delivery added 0.8% to trade at USD104.99 a barrel, with the spread between the Brent and crude contracts standing at USD11.66 a barrel.
The spread between the two contracts continued to trade near a nine-month low, due to an improving production outlook in the North Sea and amid growing concerns over the euro zone’s economic outlook.
