U.S. Jobs Data Sobers Market, Oil Slips to One-Week Low
Heading into the weekend on a sobering note, oil prices were knocked down to the lower end of their current trading range near $77 on the New York Mercantile Exchange Friday as U.S. jobs data left the market dazed and confused over the state of the economic recovery.
Moving down more than $2 from yesterday's close, the price of light, sweet crude oil ultimately settled at $77.43 a barrel on the NYMEX – the lowest settlement since October 30, 2009.
Additionally, natural gas futures tumbled nearly 19 cents from Thursday's closing price, landing at $4.595 per thousand cubic feet on the NYMEX today.
"Looks like we whacked down oil to near $77 today," commented Phil Flynn, vice president in charge of research for PFG Best in Chicago. "The bad jobs report really changed the focus away from the weak dollar and put it back on to the potential for weak demand, and I think that's what really drove the market back down today," the analyst observed.
"But even though we've pulled back, I don't think we've given up on $80-a-barrel oil just yet," Flynn added.
Unemployment Rate Bursts Optimistic Bubble
Surpassing economists' forecasts for an increase to 9.9%, U.S. unemployment shot to its highest level in more than 26 years, rising 0.4 percentage point to 10.2%, according to the Labor Department. Investors were reminded that oil demand has yet to rise above its lackluster status, and shied away from purchasing the energy commodity today.
"The jobs number was a sobering number, as the president said today," noted Flynn. "[The market] can get all optimistic about an economic recovery, but it's going to take some time -- things will get better -- but in the short term, today's number doesn't bode well for demand," he said.
Flynn continued, "In New Jersey, Sunoco closed down a refinery because demand is so poor and refining margins are so bad, and that coincides with what we've been seeing."
Looking ahead at the after effect of today's economic news, Flynn said, "On the other side of the coin, the weak jobs number probably means we'll still see more economic stimulus, and with the Federal Reserve's decision this week to keep interest rates low, it will keep the dollar under pressure and the carry trade alive, all of which will probably keep commodity prices well-bid going into next week."
Gulf Storms May Impact Supplies, Prices Next Week
Reminding the nation that hurricane season carries into November, the National Hurricane Center and AccuWeather.com reported that two tropical weather systems could usher in disruptive conditions in the Gulf of Mexico next week.
Weakened to a tropical depression near Honduras and Nicaragua, Ida could reach the Gulf of Mexico by early Monday, and an unnamed system brewing in the southwestern Gulf could also impact energy supplies in the region, Reuters said Friday.
Commenting on the near term impact of these weather conditions in the Gulf, Flynn said, "There's plenty of supply to get us through a momentary shut-down, but if it turns out that there's some longer-term damage, that may change the equation."
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- UK Oil Regulator Publishes New Emissions Reduction Plan
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- PetroChina Posts Higher Annual Profit on Higher Production
- McDermott Settles Reficar Dispute
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call
- India Halts Russia Oil Supplies From Sanctioned Tanker Giant
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- Centcom, Dryad Outline Recent Moves Around Red Sea Region
- PetroChina Set to Receive Venezuelan Oil
- Czech Conglomerate to Buy Major Stake in Gasnet for $917MM
- US DOE Offers $44MM in Funding to Boost Clean Power Distribution
- Oil Settles Lower as Stronger Dollar Offsets Tighter Market
- UK Grid Operator Receives Aid to Advance Rural Decarbonization
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call