Oil Rises After US Unemployment Drops to Six Year Low

West Texas Intermediate and Brent crudes advanced after U.S. employment gains exceeded 200,000 for a ninth month and the jobless rate fell to a six-year low, bolstering the outlook for fuel demand.

Futures rose as much as 1.6 percent in New York and 1.2 percent in London. Payrolls increased by 214,000 in October following a 256,000 gain the prior month that was more than initially estimated, Labor Department figures showed today. The unemployment rate declined to 5.8 percent. Both oils are heading for weekly declines after OPEC predicted it will need to supply less crude amid the U.S. shale boom.

“The market is concentrating on the jobs numbers,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said by phone. “The unemployment rate dropped to 5.8 percent even as the labor force expanded, which implies that more people will be consuming goods and driving. This is all good for demand.”

WTI for December delivery rose $1.05, or 1.4 percent, to $78.96 a barrel at 9:40 a.m. on the New York Mercantile Exchange. Prices are down 2 percent this week and 20 percent this year. The volume of all futures traded was 6 percent below the 100-day average for the time of day.

Brent for December settlement gained 85 cents, or 1 percent, to $83.71 a barrel on the London-based ICE Futures Europe exchange. Volume was 7.1 percent lower than the 100-day average. Prices have fallen 24 percent in 2014. The European benchmark crude traded at a $4.70 premium to WTI, compared with $4.95 at yesterday’s close.

via Bloomberg

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza