Oil Prices Rise as Traders Await U.S. Jobs Data
February 05 2016 - 6:30AM
Dow Jones News
LONDON—Oil prices rose in volatile trade Friday as traders
awaited U.S. jobs data for clues about the direction of the dollar,
but analysts say the continuing oversupply of crude will prevent
any lasting gains.
A weakness in the greenback earlier this week fueled a rally in
dollar-priced oil but the crude fundamentals remain weak due to a
supply overhang, as major producers have refused to cut output
despite prices falling sharply for nearly two years.
"Prices are finding reasons to move upward, however [they will]
be unable to sustain [this rise] as fundamentals continue to remain
weak," said Daniel Ang, analyst at Phillip Futures.
Brent crude, the global oil benchmark, rose 1% to $34.85 a
barrel on London's ICE Futures exchange after falling as low as
$33.93 earlier in the session. On the New York Mercantile Exchange,
West Texas Intermediate futures were up 1.5% at $32.19 a
barrel.
The crude market has been very volatile lately amid uncertainty
about when major producers will meet to discuss action to raise oil
prices.
"Oil price volatility has been high this week, with [the] Brent
price spanning between $32 and $36," said Michael Poulsen, oil
analyst at Global Risk Management. "Expect the volatility to
continue."
Traders are awaiting the U.S. jobs data released later today for
clues about the direction of the greenback. The Wall Street Journal
Dollar Index, which tracks the dollar against a basket of other
currencies, rose 0.1% on Friday.
On Thursday, Saudi Arabia cut prices for its highest-quality
crude oil destined for customers in Europe and Asia. The move to
lower prices would help the world's largest exporter of crude
defend its most lucrative markets against encroachment from rival
producers such as Iran, which is ramping up its output now that
Western sanctions have been lifted.
"The battle for market share continues to intensify between
Organization of the Petroleum Exporting Countries producers," said
an ANZ report.
Nymex reformulated gasoline blendstock—the benchmark gasoline
contract-—fell 0.2% to $1.03 a gallon. ICE gas oil changed hands at
$317.75 a metric ton, down $1.50 from the previous settlement.
Biman Mukherji and Benoî t Faucon contributed to this
article.
(END) Dow Jones Newswires
February 05, 2016 06:15 ET (11:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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