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NYMEX crude oil gains in Asian trading on weak U.S. job data

Published 02/09/2014, 06:51 PM
Updated 02/09/2014, 07:14 PM
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Investing.com – Nymex crude oil futures rose during Asian trading hours on Monday after a disappointing U.S. job data released on Friday.

On the New York Mercantile Exchange, light sweet crude futures for delivery in March rose 0.41% to USD100.29 a barrel on Monday during Asian trade.

On Friday, Nymex oil prices closed at USD99.84 a barrel.

U.S. oil futures were likely to find support at USD97.13 a barrel, the low from February 7 and resistance at USD100.42 a barrel, the high from December 30.

On the week, U.S. crude futures, also known as West Texas Intermediate or WTI, climbed 2.39%, the fourth consecutive weekly gain.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, rose 0.09% on Monday at 80.82.

Dollar-denominated oil futures contracts tend to rise when the dollar falls, as this makes oil cheaper for buyers in other currencies.

Meanwhile, the Dow Jones Industrial Average and the S&P 500 ended more than 1% higher on Friday, due to perceptions that the economy is improving but not fast enough to prompt the Federal Reserve to rush to taper stimulus programs.

U.S. shares and crude oil have traded in tandem for several months, on the belief share prices act as a proxy for economic sentiment and are a bellwether for oil demand.

Data on Friday showed that the U.S. economy added 113,000 jobs in January, well below expectations for jobs growth of 185,000, after December's lackluster gain of 75,000 jobs.

It was the weakest two-month stretch of job creation in three years as inclement weather contributed to a slowdown in hiring.

Yet the report also showed that the number of people participating in the labor force edged up to 63% from a 30-year low of 62.8% last month, while the unemployment rate unexpectedly ticked down to a five year low 6.6% from 6.7% in December.

In the week ahead, Fed Chair Janet Yellen is to testify on the central bank’s semiannual monetary policy report in Washington. Her comments will be closely watched.

Monthly supply and demand reports from the U.S. Energy Information Administration, the International Energy Agency and the Organization of the Petroleum Exporting Countries will also be in focus.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers increased their bullish bets in oil futures in the week ending February 4.

Net longs totaled 275,931 contracts, compared to 260,282 in the preceding week.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for March delivery rose 0.10% to 108.96 on Monday.

The March Brent contract picked up 2.89% during the previous week. Meanwhile, the spread between the Brent and the crude contracts stood at USD8.68 a barrel.

The London-traded Brent contract was boosted amid concerns over declining output from the Buzzard oilfield in the North Sea, which is expected to undergo maintenance in the second quarter this year.

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