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Oil rally continues despite discouraging jobs data
Source: Agencies |
December 4, 2010, Saturday
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A SURPRISING increase in the number of unemployed Americans wasn't enough to stall oil's momentum yesterday as it cruised to a 26-month high.
Benchmark oil settled up US$1.19 at US$89.19 a barrel on the New York Mercantile Exchange. It's the second time in less than a month that oil has reached the level where it was in the fall of 2008. There are widespread expectations that the price will hit US$90 a barrel by year's end and head toward US$100 a barrel by next spring when traders begin looking ahead to the summer driving season.
In a surprising development, the Labor Department said yesterday the U.S. unemployment rate climbed to seven-month high of 9.8 percent in November, as hiring slowed. Employers added a net total of only 39,000 jobs last month as retailers, factories, construction companies, financial firms and the government all cut jobs.
Many traders appeared to view the discouraging jobless report as a possible blip after two days in which stronger economic data from the United States and China created hope that the global economy was improving.
For example, manufacturing activity expanded in the United States and China, while U.S. retail and auto sales both recorded gains. And the Institute of Supply Management, a private trade group, said yesterday the service sector expanded for the 11th straight month in November.
"If we were stringing together a couple of negative reports, then that psychology could change," said Tom Bentz, an analyst at BNP Paribas Commodity Futures. "But one out of the last few reports negative may be overlooked for now."
A weaker dollar also supported oil and some other energy products, which are priced in dollars. That means buyers who use other currencies can get more for their money when the dollar grows weaker.
In late trading in New York, the euro jumped to US$1.3375 from US$1.3210 late Thursday. It earlier edged above US$1.34 for the first time since November 24.
In other Nymex trading in January contracts, heating oil rose 3.28 cents to settle at US$2.4874 a gallon, gasoline slipped 0.32 cent to US$2.3521 a gallon and natural gas gained 0.6 cent to US$4.349 per 1,000 cubic feet.
In London, Brent crude rose 78 cents to US$91.42 a barrel on the ICE futures exchange.
Benchmark oil settled up US$1.19 at US$89.19 a barrel on the New York Mercantile Exchange. It's the second time in less than a month that oil has reached the level where it was in the fall of 2008. There are widespread expectations that the price will hit US$90 a barrel by year's end and head toward US$100 a barrel by next spring when traders begin looking ahead to the summer driving season.
In a surprising development, the Labor Department said yesterday the U.S. unemployment rate climbed to seven-month high of 9.8 percent in November, as hiring slowed. Employers added a net total of only 39,000 jobs last month as retailers, factories, construction companies, financial firms and the government all cut jobs.
Many traders appeared to view the discouraging jobless report as a possible blip after two days in which stronger economic data from the United States and China created hope that the global economy was improving.
For example, manufacturing activity expanded in the United States and China, while U.S. retail and auto sales both recorded gains. And the Institute of Supply Management, a private trade group, said yesterday the service sector expanded for the 11th straight month in November.
"If we were stringing together a couple of negative reports, then that psychology could change," said Tom Bentz, an analyst at BNP Paribas Commodity Futures. "But one out of the last few reports negative may be overlooked for now."
A weaker dollar also supported oil and some other energy products, which are priced in dollars. That means buyers who use other currencies can get more for their money when the dollar grows weaker.
In late trading in New York, the euro jumped to US$1.3375 from US$1.3210 late Thursday. It earlier edged above US$1.34 for the first time since November 24.
In other Nymex trading in January contracts, heating oil rose 3.28 cents to settle at US$2.4874 a gallon, gasoline slipped 0.32 cent to US$2.3521 a gallon and natural gas gained 0.6 cent to US$4.349 per 1,000 cubic feet.
In London, Brent crude rose 78 cents to US$91.42 a barrel on the ICE futures exchange.
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