Oil prices continue to climb in the Monday session. In North American trade, WTI/USD futures are trading at $51.92. Brent crude futures have climbed to $54.99, as the Brent premium stands at $3.07. In the US, ISM Non-Manufacturing PMI jumped to 57.2, beating the forecast of 55.3.
Employment numbers were on center stage on Friday, as the US released key employment indicators. In the US, the numbers were a mix. Nonfarm Payrolls improved to 178 thousand, edging above the forecast of 177 thousand. This marked a 4-month high. However, Average Hourly Earnings, which measures wage growth, surprised with a decline of 0.1%, short of the estimate of 0.2%. This was the first decline in wage growth since March. The unemployment rate dropped to just 4.6%, well below the forecast of 4.9%. The strong labor market has been a key factor in the strong US economy, which saw GDP grow at a clip of 3.2% in the third quarter.
US crude enjoyed a stellar week, skyrocketing 13.8 percent against the US dollar. Oil prices surged as OPEC made good on its promise to reach an agreement to cut production levels. The deal caught the markets by surprise, as most analysts had expected the usual ending of an inconclusive meeting. One of the major sticking points had been Iran’s insistence to maintain output at pre-sanction levels. Saudi Arabia swallowed hard and accepted Iran’s demand, paving the path for the first cap agreement by OPEC since 2008. The deal is intended to reduce the worldwide glut of oil and stabilize oil prices. However, OPEC members have cheated on their production quotas in the past, and OPEC will be hard-pressed to enforce the agreement. As well, US shale producers could step in and ratchet up production, which could trigger lower crude prices.
Monday (December 5)
- 8:30 US FOMC Member William Dudley Speech
- 9:45 US Final Services PMI. Estimate 54.9
- 10:00 US ISM Non-Manufacturing PMI. Estimate 55.3. Actual 57.2
- 10:00 US Labor Market Conditions Index. Actual 1.5
- 14:05 US FOMC Member James Bullard Speech
*All release times are EST
*Key events are in bold
WTI/USD for Monday, December 5, 2016
WTI/USD December 5 at 11:45 EST
Open: 51.25 High: 52.41 Low: 51.07 Close: 51.92
WTI USD Technical
- WTI/USD was flat in the Asian session. The pair posted gains in the European session but is unchanged in North American trade
- 46.54 is providing support
- 52.22 was breached earlier in resistance and remains a weak line
Further levels in both directions:
- Below: 46.54, 40.57, 33.22 and 26.06
- Above: 52.22, 58.32 and 65.05