|News||Crude is volatile ahead of the non-farm payrolls|
|Analysis||Crude oil is trading in a narrow range today after it rose significantly yesterday on ADP report which showed an improvement in the U.S. labor sector, the thing that spread optimistic outlook for the global growth.|
The ECB decision to suspend the collateral rules on Portugal made investor’s outlook for the European economy much better and eased concerns that prevail in the markets over the European crisis, which pushed oil prices to the upside despite the less than expected drop in crude inventories as reported by EIA, as it was expected to drop by 2.5 million barrel but the report showed that inventories fell by 0.9 million barrel.
The U.S. data released yesterday about the labor sector showed an improvement, as the ADP showed more than expected added jobs in the private sector and jobless claims, continuing claims dropped more than expected which gave a positive signs for the non-farm payrolls that will be released today.
Crude oil opened today’s session at $98.75 a barrel and reached so far a high of $98.94 a barrel from a low of $98.32, where it is currently hovering around $98.56 a barrel; however, the USDIX index that tracks the dollar against six major currencies rose in today’s trading to reach a high of 75.09 since it opened at 74.90 where it recorded a low of 74.87 and it is currently trading at 75.03.
Good growth in the U.S. labor sector will help in improving the outlook for the United States economic growth and global recovery which will have a positive effect on crude oil as the future demand will increase with good global growth.
Crude will remain volatile ahead of the non-farm payroll which is expected to show 105 thousand added jobs compared to the previous added jobs 54,000 and steady unemployment which will define the trend in the coming period.