Crude oil slipped below the $99.80 level after hitting the highest level since December 27 at above $100 a barrel following the decline in US unemployment on Friday improved the outlook for fuel demand in the world’s largestt oil consuming economy.
Meanwhile, the lower than expected rise in January payrolls may determine the new head of the US Federal Reserve, Janet Yellen, to keep the monetary policy loose which could keep demand on oil sustained.
“The overall picture of the economy remains one coming out of recession and quite clearly in recovery mode. Should we push through say $100.50 on West Texas and $110 on Brent, we could see a spike on technical buying that could continue the rally”, said Michael McCarthy.
Also supporting oil prices was the cold weather in the US which boosted energy demand. According to Commodity Weather Group LLC, last month was the coldest January since 1994 in the States.
Investors will also closely track US and Chinese economic data this week that could shed greater light on the demand outlook in the world`s two largest oil consumers, therefore caution may prevail throughout the week and limit the gains.
Easing geopolitical tensions over Iran`s nuclear program also weighs on oil prices. Iran and six world powers are due on February 18 to start a final round of talks which may lead to leaner sanctions on Tehran which may increase oil supplies.
- WTI crude oil futures for March is trading around $ 99.75 a barrel after falling $0.13
- Brent futures for March settlement is trading around $ 109.20 a barrel after falling $0.37
- Natural gas is trading at $ 4.70 per cubic feet after falling 1.57%
- Gasoline is trading at $ 2.749 per cubic feet after rising 0.01%
- Heating oil (diesel) is trading at $ 3.0403 a gallon after falling 0.33%