Gold Heads For A Modest Weekly Gain, Eyes To Track NFP Report

Crude oil is steady as of this writing around the $97.60 level and is heading for the longest streak of weekly gains in more than eight years amid believes economic recovery in the world’s biggest crude consumer is accelerating, brightening the outlook for oil demand.

Crude is trading as of this writing around the $97.55 a barrel level compared with the opening at $97.44 and with the highest at $97.68 and the lowest at $97.37. On the short term crude finds support at $97.30 then at $96.85 and resistance at $98.00 then at $98.30.

A report later this day may show that the U.S. added more jobs last month which will keep investors on edge. U.S. employers probably added 165,000 workers last month after a 155,000 increase in December and the unemployment rate might remain steady at 7.8%.

Gains however were limited after China’s data dented sentiment. The manufacturing PMI fell to 50.4 in January, missing market expectations, from 50.6 in December, underscoring the fragility of the recovery in the world’s second largest crude consumer.

“Recovery is still at an early stage… it’s not going to be smooth sailing or a straight line up. China is one of the big crude users, so when Chinese data starts to disappoint the market will start to think about what the pace of recovery is”, said Selena Ling from OCBC.

Brent is trading as of this writing around the $115.79 after rising 0.21%; natural gas is trading at $3.317 per 1,000 cubic feet after falling 0.66%; gasoline is trading at $3.0313 a gallon after falling 0.01%; heating oil is trading at 3.1214 after rising 0.09%.

“Brent had a phenomenal run in recent times... after the announcement of QE3, oil was not performing quite as strongly as some analysts were predicting, so maybe it`s just playing a bit of catch up now from the fact that the Fed has reiterated its bond buying program," said Ben Le Brun from OptionsXpress, Sydney.

Meanwhile, the tensions in the Middle East and North Africa continue to support oil prices due to supply worries. Syria protested Thursday to the UN over the Israeli air strike on its territory and warned of a possible “surprise” response.

Moreover, tension over Iran`s uranium enrichment plan continued to rise. Iran told the U.N. nuclear agency it’s installing new centrifuges at its Natanz facility that can enrich more uranium in less time.

“We do expect oil prices to remain sensitive to geopolitical friction this year… The main thing on our radar is the Israel friction with Syria and Iran. If there’s any commotion in that direction, we’ll definitely see oil prices spiking all over again," said Barnabas Gan, from Oversea-Chinese Banking, Singapore.