Crude Steadies Above $82 as Jobs Data Weakens Dollar
Edging back into positive territory following an initial sell off at the open of Friday's trading session on the New York Mercantile Exchange, U.S. crude oil futures settled once more near $82 a barrel. A weaker greenback helped stave off the energy commodity's losses after the market's expectation for a healthier labor market lost its gleam.
The price of light, sweet crude oil for February delivery traded slightly above yesterday's price tag, ultimately settling at $82.75 ahead of the weekend. Midday news of a fire at the Chance refinery in Newfoundland, which transports supplies to New York Harbor, sent gasoline futures soaring and added a final boost to NYMEX crude.
Additionally, bone-chillingly cold weather conditions did little to help sustain another run up on the NYMEX for natural gas futures in light of an oversupplied market. Spot prices at the Henry Hub for February delivery remained under pressure at the end of the week, with the energy commodity closing just under the $6-threshold at $5.749 per thousand cubic feet.
Market Eyes U.S. Payrolls, Refinery Fire; Dollar Takes a Hit
"The big event for the market going into Friday was the jobs number," said Phil Flynn, vice president in charge of research at futures trading firm PFG Best in Chicago.
On Friday, the Labor Department reported that U.S. employers trimmed as many as 85,000 jobs in December. According to Reuters, November's payrolls were revised to show an addition of 4,000 jobs in contrast to initial estimates indicating that the economy lost 11,000 jobs.
However, with October's revised payrolls, the economy actually shed 1,000 more jobs than previously estimated over the two-month period, Reuters noted.
"Going into the number, there were so many expectations, but I don't think the market was all that surprised since the number came in so close to what the ADP reported a week ago," Flynn remarked.
"For the jobs number to have had a big effect on the crude market, we would have had to have seen either a build or a loss of more than 300,000 jobs," the analyst contended. "So, seeing that the results were so close to the ADP's, I think today's report was neutral for oil."
Today's retreating economic optimism in the market did, however, spur investors away from seeking safe haven in the U.S. currency, making energy commodities cheaper -- and thus more appealing -- for buyers with dollars in hard.
Flynn also emphasized that because the market was influenced by today's jobs report, lowered expectations for a spike in near-term interest rates will enable the oil price to continue flexing its muscles.