IV:WTI oil futures edge lower on U.S. demand concerns
Investing.com - U.S. oil futures edged lower on Monday, after disappointing U.S. nonfarm payrolls data dampened optimism over the U.S. economy.
On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in March traded at USD92.66 a barrel during European morning trade, down 0.3%. New York-traded oil futures held in a tight range between USD92.36 a barrel and USD93.10 a barrel.
The March contract settled 1.15% higher on Friday to end at USD92.95 a barrel. Nymex oil futures were likely to find support at USD92.22 a barrel, the low from January 10 and resistance at USD93.56 a barrel, the high from January 10.
The U.S. economy added just 74,000 jobs in December, the Labor Department said, the smallest increase since January 2011 and well below expectations for 196,000 new jobs.
The unemployment rate fell to a five-year low of 6.7% last month from 7% in November, but this was due in part to people dropping out of the labor force. The labor participation rate fell to an almost 35-year low of 62.8%.
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.
The disappointing data cooled expectations that the Federal Reserve would cut its stimulus program again this month. The central bank cited a stronger labor market in its decision to taper its asset purchase program by USD10 billion in December to USD75 billion-a-month.
Minutes of the Fed’s December meeting released last week showed that officials were keen to stress that further reductions in stimulus were not on a “preset course” and would be undertaken in “measured” steps. The central bank is scheduled to meet January 28-29 to review the economy and assess policy.
Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for February delivery inched down 0.1% to trade at USD106.49 a barrel, while the spread between the Brent and U.S. crude contracts stood at USD13.83 a barrel.
