Oil spiked above $70 in intra-day trading on the New York Mercantile Exchange Friday, continuing the commodities rally of the last month.
Oil prices were initially buoyed by a report from the US Labor Department citing that employers cut 345,000 jobs in May, the least amount of jobs cut since last September. The lower-than-expected numbers helped to reinforce the market's belief that the worst of the economic slump has passed.
After peaking at $70.32, oil trading was choppy, with crude settling at $68.45 at the close of the NYMEX floor, which is a drop of .5% or 36 cents from Thursday's close.
Despite the lower number of jobs cut, US unemployment hit a 25-year high of 9.4%. The US dollar also gained strength today.
"It's pretty clear that the market seems to be looking forward to the recession of the last six months to be bottoming out," said Gene McGillian, energy analyst with Tradition Energy in Stamford, Connecticut.
Initially, the reports of the reduced number of unemployed sparked trading, but McGillian believes that market mulled on those numbers that were, although lower than expected, still a 25-year high.
"Everything looks like its climbing higher," he continued, stating that the price of oil moving forward truly depends on demand and inventories. Nonetheless, McGillian concluded, "At this time, the bulls are in control, and they keep pushing the market higher."
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