MW: Oil wavers, under pressure after U.S. jobs report
By Claudia Assis and Nick Godt, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures wavered between small gains and losses Friday after the U.S. Labor Department reported a much smaller-than-expected rise in payrolls, but some good news from the services sector and a weaker dollar provided a floor for prices.
Crude oil for January delivery (CLF11 88.21, +0.21, +0.24%) was flat at $88 a barrel after trading as high as $88.36 earlier. Crude had been up slightly before the jobs report, which rekindled worries about growth and energy demand.
U.S. nonfarm payrolls rose by 39,000 in November, far less than the 155,000 gain expected by economists surveyed by MarketWatch.
The unemployment rate unexpectedly rose to 9.8% in November from 9.6% in October according to a separate survey of 60,000 households. Economists had been expecting the unemployment rate to remain steady. Read more on the jobs report.
“The data, showing that the U.S. economy failed to add enough jobs to reduce the unemployment rate, also happens to tie in with some of the recent petroleum demand data, which has shown some weaker year-on-year comparisons,” wrote Tim Evans, an analyst with Citigroup’s Citi Futures Perspective, in a note.
‘We continue to see the market as overvalued ... but can’t rule out higher prices in the near term as long as the markets continue to reject bearish news like the employment data,” he added.
The dollar extended losses after the report. The dollar index (DXY 79.26, -1.04, -1.29%) fell to 79.61 from 80.21 late Thursday and 80.059 before the data.
A weaker dollar favors commodities as it makes them less expensive for holders of other currencies, broadening their investment appeal.
On Thursday, crude closed at a two-year high, tracking broad relief over European sovereign debt in the broad market.
Meanwhile, gasoline futures turned slightly lower, with the January contract (RBF11 2.35, +0.05, +2.09%) off 2 cents, or 1%, to $2.33 a gallon.
Natural-gas futures traded higher, bucking the trend for most energy-related commodities. The January contract (NGF11 4.34, -.00, -0.07%) added 2 cents, or 0.4%, to $4.36 per million British thermal units.
