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Brent rises towards $118 ahead of US March jobs data

Brent rises towards $118 ahead of US March jobs data
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First Published: Fri, Apr 01 2011. 01 25 PM IST
Updated: Fri, Apr 01 2011. 01 25 PM IST
Singapore: Brent crude rose towards $118 on Friday, touching its highest in almost four weeks, as investors expect a positive US payrolls report due later in the day to reinforce belief that a job market improvement is under way in the world’s top oil importer.
Brent for May rose 38 cents to $117.74 a barrel at after earlier touching $117.90, the highest price since March 7 and less than $2 from a 2-1/2-year high of almost $120 reached in February.
US crude rose 58 cents to $107.30 after earlier touching $107.65, an intraday peak since September 2008.
Oil prices gained traction in the second half of this week after a report on Thursday showed US jobless claims fell last week and data pointed to improving employment in the Midwest.
“The market is expecting some positive payroll data from the US later today,” said Serene Lim, a Singapore-based oil analyst at ANZ Bank.
“In the past two days, the financial markets have been the main driver of higher crude oil prices, but in the back of every investor’s mind there is the unrest in the Middle East and that is supporting the market.”
Asian shares rose as markets digested Friday news that China’s official purchasing managers’ index rose in March from a six-month low, but was still a touch under the Reuters median forecast.
The US economy probably recorded a second straight month of solid job growth in March, when non-farm payrolls rose by 190,000, according to a Reuters poll, proof the labor market has turned the corner after lagging the broader economic recovery.
While improving economic performance is lifting industrial demand for energy in the US, high prices at the pump are damaging consumer confidence and capping gasoline demand.
Mideast
In Libya, rebels on Thursday cheered the defection of the country’s foreign minister as a sign that Muammar Gaddafi’s rule was crumbling, but US officials warned he was far from beaten and made clear they feared entanglement in another painful war.
Libya’s top oil official said on Thursday he remained in Tripoli and the country was continuing to produce some oil, although output was much reduced.
Still, J.P. Morgan analysts were doubtful that any Libyan crude supplies would reach world oil markets on a sustained basis, even after Qatar earlier this week offered to market crude in rebel control, because of the risks associated with loading cargoes from a country in war.
“The opposition forces, although recognised by France and Qatar, have no recognition from the UN itself,” J.P. Morgan analysts headed by Lawrence Eagles said.
“Moreover, production would require the return of international workers who left the country when the conflict broke out. Their return is difficult to envisage without stability on the ground.”
In the Mideast Gulf, Bahrain has stepped up arrests of cyber activists and Shi’ites, with more than 300 detained and dozens missing since it launched a crackdown on pro-democracy protests, the opposition said on Thursday.
Bashar al-Assad, the President of minor oil exporter Syria, has set up a committee to look into replacing a decades-old emergency law with anti-terrorism legislation after a wave of demonstrations for greater freedoms.
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First Published: Fri, Apr 01 2011. 01 25 PM IST
More Topics: Markets | Oil | Brent Commodity | Dollar | Crude Prices |