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Oil prices hold despite bad jobs figures
By Rebekah Kebede |
April 6, 2009, Monday
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Print Edition
Print Edition
OIL prices settled above US$52 a barrel on Friday, slightly lower on the day after a report that United States unemployment in March soared to a 25-year high.
But optimism that the economy will soon turn around curtailed losses. Crude had jumped nearly 9 percent on Thursday on hopes that G20 actions would spur an economic recovery.
US light crude for May delivery settled at US$52.51 a barrel, down 13 US cents, but retained most of Thursday's gain of US$4.25 that lifted the -contract to US$52.64.
London Brent crude settled at US$53.47 a barrel, up 72 US cents.
"The oil market is struggling between hope and reality, much like what you also see in other markets," said Andy Lebow, a broker at MF Global in New York. "The reality is that there is a dismal demand picture and so it is hard for oil to sustain gains."
Oil moved down by around 1.44 percent after data came out showing US employers slashed 663,000 jobs in March, lifting the unemployment rate to 8.5 percent, the highest since 1983.
"The jobs report was apparently priced in and was pretty much in line with expectations," said Mike Fitzpatrick, vice president at MF Global.
A stronger dollar also weighed on oil prices. The greenback firmed as rising US jobs data dulled market optimism and enhanced the dollar's safe-haven status.
Despite Friday's losses, some market optimism remained.
"The equities market is turning around here and the oil market is tracking it. The long side of the (oil) market has seen investments increase in February and March as a lot of participants think that things are changing for the better here," said Gene McGillian, an analyst.
"Yesterday's (Friday's) rally was spurred by the financial side of the market. But there has been no substantial change in oil fundamentals and unless we see supplies come down and demand improve, it remains to be seen whether the upward trend we've seen lately could be sustained," he said.
The US administration expects the economy to turn the corner by the end of the year with job growth coming some months after that, said Christina Romer, head of the White House Council of Economic Advisers.
But optimism that the economy will soon turn around curtailed losses. Crude had jumped nearly 9 percent on Thursday on hopes that G20 actions would spur an economic recovery.
US light crude for May delivery settled at US$52.51 a barrel, down 13 US cents, but retained most of Thursday's gain of US$4.25 that lifted the -contract to US$52.64.
London Brent crude settled at US$53.47 a barrel, up 72 US cents.
"The oil market is struggling between hope and reality, much like what you also see in other markets," said Andy Lebow, a broker at MF Global in New York. "The reality is that there is a dismal demand picture and so it is hard for oil to sustain gains."
Oil moved down by around 1.44 percent after data came out showing US employers slashed 663,000 jobs in March, lifting the unemployment rate to 8.5 percent, the highest since 1983.
"The jobs report was apparently priced in and was pretty much in line with expectations," said Mike Fitzpatrick, vice president at MF Global.
A stronger dollar also weighed on oil prices. The greenback firmed as rising US jobs data dulled market optimism and enhanced the dollar's safe-haven status.
Despite Friday's losses, some market optimism remained.
"The equities market is turning around here and the oil market is tracking it. The long side of the (oil) market has seen investments increase in February and March as a lot of participants think that things are changing for the better here," said Gene McGillian, an analyst.
"Yesterday's (Friday's) rally was spurred by the financial side of the market. But there has been no substantial change in oil fundamentals and unless we see supplies come down and demand improve, it remains to be seen whether the upward trend we've seen lately could be sustained," he said.
The US administration expects the economy to turn the corner by the end of the year with job growth coming some months after that, said Christina Romer, head of the White House Council of Economic Advisers.
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