Oil rally continues despite discouraging jobs data
NEW YORK, USA (AP) — An unexpected increase in the US unemployment rate wasn’t enough to stall oil’s rally Friday as prices edged higher for a third day.
Many traders appeared to view the discouraging jobless report as a possible blip after two days in which stronger economic data from the United States and China created hope that the global economy was improving.
Benchmark oil for January delivery added 42 cents to US$88.42 a barrel in midday trading on the New York Mercantile Exchange. Many analysts expect the price to top US$90 a barrel before the end of the year.
The Labor Department said Friday that the US unemployment rate climbed to seven-month high of 9.8 per cent in November, as hiring slowed. Employers added a net total of only 39,000 jobs last month as retailers, factories, construction companies, financial firms and the government all cut jobs.
Traders shrugged off Friday’s report in part because of this week’s slate of improving economic data, particularly in the US and China, said Tom Bentz, an analyst at BNP Paribas Commodity Futures.
“If we were stringing together a couple of negative reports, then that psychology could change,” he said. “But one out of the last few reports negative may be overlooked for now.”
Many analysts expect oil prices to continue to reach US$90 a barrel this month and to top US$100 a barrel next spring, when expectations about the summer driving season take hold.
“It seems like the market has got that in its sights and sometimes when that happens, it’s kind of a self-fulfilling prophecy,” Bentz said. “The market ends up getting there just for the sake of getting to the level a lot of people want to see.”
A weaker dollar also supported oil and some other energy products, which are priced in dollars. That means buyers who use other currencies can get more for their money when the dollar grows weaker.
In the wake of the November jobs report the euro jumped to US$1.3382 from US$1.3210 late Thursday in New York.
In other Nymex trading in January contracts, heating oil edged up 0.81 cent to US$2.4627 a gallon, gasoline lost 1.59 cents to US$2.3394 and natural gas slipped 2.9 cents to US$4.314 per 1,000 cubic feet
In London, Brent crude rose 13 cents to US$90.83 a barrel on the ICE futures exchange.
