×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Oil falls, awaits US jobs data, storm

Oil falls, awaits US jobs data, storm
Comment E-mail Print Share
First Published: Fri, Sep 02 2011. 02 31 PM IST
Updated: Fri, Sep 02 2011. 02 31 PM IST
Singapore: Oil futures fell on Friday as the market nervously awaited US jobs data for new evidence on whether the world’s largest crude consumer can avoid recession.
A storm blowing off the US Gulf of Mexico provided modest price support after major oil and gas producers shut down platforms and evacuated workers to limit any damage.
By 2:04pm, Brent was trading 48 cents lower at $113.87 and US crude was 70 cents lower at $88.23.
So far the contracts are on track for a second weekly gain, as the market recovers from a six-month low struck in early August of less than $100 a barrel for Brent.
But traders said the mood was still cautious and activity would focus around US jobs data at 12.30 GMT. After that trade could thin ahead of the long holiday Labor Day weekend in the United States, considered as the end of the summer driving season.
The consensus forecast is for a 75,000 addition to jobs in August, but the market is discussing a smaller number after a decline in the employment component of the Institute for Supply Management’s factory activity index.
“It’s wait and see at the moment,” said Rob Montefusco, oil trader at Sucden Financial.
He saw no compelling fundamental argument for a rally, although low returns elsewhere could spur some investment class buying, provided economic data was not too daunting.
“If we’re not getting real demand, we could struggle to push prices. At the same time, low interest rates might mean we get some more investors,” he said.
The toppling of Libya’s Moammar Gadhafi has rekindled the debate about how quickly the Opec member’s production can return to international markets.
The newly-appointed chairman of Libya’s National Oil Corporation said this week Libya’s oil production could start within weeks and reach full pre-war output within 15 months, but Gaddafi has vowed to prevent oil exports.
For now, traders said the market did not need extra production.
“Demand readings suggest we have not really missed it (Libyan oil),” said Montefusco.
Equally the possibility of storm disruption in the United States has had little price impact.
Tropical Depression 13, which formed over the central Gulf of Mexico, was moving very slowly, the US National Hurricane Center said.
US crude futures are still trading at a huge discount to Brent. On Friday, the discount headed towards $26 a barrel, shy of the record of $26.69 on 19 August, according to Reuters data.
Outages in the North Sea and Nigeria have helped to add support to Brent, while US futures have sagged below the psychological threshold of $90 a barrel.
Comment E-mail Print Share
First Published: Fri, Sep 02 2011. 02 31 PM IST
More Topics: Markets | Oil | Commodity | Brent | Crude |