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Crude gains on robust U.S. jobs report, Fed concerns cap gains

Published 12/06/2013, 12:54 PM
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Investing.com - Oil prices rose on Friday after data revealed the U.S. economy picked up more jobs than expected in November, though the monetary implications of such improving data capped the commodity's gains.

On the New York Mercantile Exchange, light sweet crude futures for delivery in January traded at USD97.66 a barrel during U.S. trading, up 0.29%.

The commodity hit a session low of USD97.08 and a high of USD98.05. The January contract settled up 0.19% at USD97.38 a barrel on Thursday.

Oil futures were likely to find support at USD92.57 a barrel, Monday's low, and resistance at USD98.80 a barrel, the high from Oct. 28.

The Department of Labor reported earlier that the U.S. economy added 203,000 jobs in November, beating expectations for a 180,000 increase and up from a downwardly revised 200,000 rise the previous month.

In the private sector, 196,000 jobs were added last month, compared to expectations for a 180,000 rise, after an increase of 214,000 in October.

The report also said the U.S. unemployment rate fell to 7.0% in November from 7.3% in October, beating expectations for a downtick to 7.2%.

Also on Friday, the preliminary Thomson Reuters/University of Michigan consumer sentiment index increased to 82.5 in December from 75.1 the previous month, far surpassing expectations for a 76.0 reading.

The data sent oil rising on sentiments that the U.S. economy is gaining steam and will demand more fuel and energy going forward.

Monetary implications of a more robust U.S. economy capped oil's gains, however.

The jobs report kept expectations firmly in place that the Federal Reserve will begin scaling back its USD85 billion in monthly bond purchases in 2014.

Fed bond purchases aim to drive recovery by driving down interest rates, weakening the dollar while they remain in place, though talk of their dismantling strengthens the greenback.

A stronger greenback makes oil a less attractive commodity on dollar-denominated exchanges.

Meanwhile on the ICE Futures Exchange, Brent oil futures for January delivery were up 0.42% at USD111.45 a barrel, up USD13.79 from its U.S. counterpart.










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