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Oil rises above $69 buoyed by US jobs data

Oil rises above $69 buoyed by US jobs data
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First Published: Fri, Jun 05 2009. 08 37 AM IST
Updated: Fri, Jun 05 2009. 08 37 AM IST
Singapore: US crude futures rose above $69 a barrel on Friday, but traded below seven-month highs hit in the previous session, drawing strength from positive US jobs data, a rally in stock markets and a weaker dollar.
The oil market added to gains of 4% in the previous session on rising hopes for a recovery in oil demand following data showing the number of US workers filing new claims for jobless benefits fell for a third straight week.
“The market is pricing in improved macro economic conditions,” said Yingxi Yu, an analyst at Barclays Capital in Singapore.
US crude for July delivery was trading 37 cents higher at $69.18 a barrel by 7:48am, after peaking at $69.45. The market hit $69.60 a barrel a day earlier - its highest level since early November. London Brent gained 21 cents to $68.92.
But the market is still trading 53% below the record high of more than $147 hit in mid-July last year.
US investment bank Goldman Sachs said on Thursday a potential economic rebound alongside production cuts by the Opec cartel could propel crude to $85 a barrel by the end of the year and to $95 a barrel by the end of 2010. [
Opec seaborne oil exports, excluding Angola and Ecuador, will rise 250,000 barrels per day (bpd) in the four weeks to 20 June, said an analyst who tracks future shipments.
Supply unease may also be fed by news that Venezuela is readying to nationalise petrochemical projects as it steps up a drive to put key industries in state hands.
Some analysts cautioned, however, that a staggering rebound in oil prices from lows near $30 a barrel this winter might be overdone, given continued soft demand and high stockpiles.
“The view is demand is not falling through a hole and Opec will be able to defend prices on the downside. Therefore prices are moving towards the floor explicitly stated by Opec,” Yu said.
The US dollar inched down against a basket of major currencies on Friday, with investors shifting money to higher-yielding currencies from the safe-haven dollar on views the global recession is easing.
The dollar index, a gauge of the greenback’s performance against a basket of six currencies, slipped 0.2% to 79.353.
“Risk aversion moves are inevitable if something happens to dampen hopes, as people have been taking more risks recently,” said Minoru Shioiri, a senior manager of FX trading at Mitsubishi UFJ Securities, referring to the dives in the dollar.
“But an overreaction in the market is also unlikely, as players are not taking as risky positions as they did a year ago.”
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First Published: Fri, Jun 05 2009. 08 37 AM IST
More Topics: Markets | Oil | Crude | Energy | Commodities |