|Analysis||Crude oil rebounded slightly on Friday above $75 a barrel, after falling the previous two days, ahead of the release of the U.S. non-farms payrolls report.|
Yesterday, oil slipped after the release of downbeat services report in the U.S. showing that the sector contracted. The contract on Thursday shed $0.14 closing at $76.46, while recording a high of $77.50 per barrel and a low of $75.54 per barrel. On the other hand, the drop in stocks and rise in the dollar damped demand on the black gold.
U.S. stocks tumbled after the grim ISM non-manufacturing report. Also most Asian stocks fell today, tracking losses in the U.S. market. However, Nikkei index closed exceeding 10,000 points for the first time since 5 weeks boosted by shares of the exporting sector.
In the currency market, the U.S. dollar plunged today before the release of the U.S. jobs report which is expected to show a slow down in unemployment. The greenback advanced the previous day after Trichet's announcement that the ECB will scale back non-standard measures.
Moreover, the President of the ECB also added that a strong U.S. dollar is better for them and the U.S. The dollar index, which tracks the dollar movements versus six major currencies, plummeted to 74.69 from the opening at 74.79. The dollar's slide is supporting commodities, especially gold which touched a new high yesterday at $1226.25 an ounce.
Eyes today are on the jobs report which may show a deceleration after the expansion signaled in the economy in the third quarter. Analysts are anticipating the 26-year high jobless rate will stagnate at 10.2%.
Meanwhile, oil prices are very sensitive to U.S. data as it reflects the recovery signs in the world's top crude consumer. Oil is currently traded at $76.02 recording a high of $76.30 and a low of $75.60, while it is expected to face resistance at 77.05 and support at 75.35.