Kippreport gets insights from Mike Belk, CEO and president of Daimler Middle East and LevantMarch 26, 2015 12:02
Brent Rises near $123; Eyes U.S. Jobs Report
April 5, 2012 1:17 by kippreport
Brent crude rose towards $123 a barrel on Thursday after falling sharply in the previous session on a big jump in U.S. oil inventories, as investors covered short positions ahead of a key U.S. economic report.
Prices were also supported by fresh signs of a recovery in the U.S. economy and easing fears of a sharp slowdown in China.
Market participants will be looking to the March nonfarm payrolls report from the U.S. on Friday for further evidence of expansion at the world’s top oil consumer.
Front-month Brent crude rose 61 cents to $122.95 a barrel by 0301 GMT, after settling down $2.52 at $122.34 on Wednesday. U.S. crude futures gained 73 cents to $102.20, after falling $2.54 in the previous session.
“There is some short covering after yesterday’s big fall, and economic data is also helping,” said Ken Hasegawa, a commodities derivatives manager at Newedge brokerage in Tokyo. “Trading will be quiet with everyone waiting for the U.S. employment data on Friday.”
Oil prices fell sharply on Wednesday after a government report showed U.S. crude stockpiles rose by 16.1 million barrels in the second half of March, their largest two-week gain since 2001 and far beyond analysts’ estimates, according to data from the Energy Information Administration.
The gains sent stockpiles to the highest level since June 2011 and helped counter concerns about how EU and U.S. sanctions on Iran might affect supplies, which have already been cut by disruptions from Yemen, Syria, South Sudan and the North Sea.
A report showing U.S. businesses adding 209,000 jobs in March slightly beat expectations and raised hopes for a positive nonfarm payrolls report on Friday.
The key jobs report for March from the U.S. Labor Department is expected to show a gain of 203,000 jobs, including a rise in private payrolls of 218,000.
Sentiment over China’s economic prospects also strengthened after the services sector expanded solidly in March and business confidence hit an 11-month high, though overall activity remained below its long-term average, a private sector survey of purchasing managers showed on Thursday.
The loss of Iranian barrels continued to support prices, as Japanese refiners planned to cut crude imports from Tehran yet again in April as they shy away from renewing annual contracts.
Japan, the world’s third largest oil consumer, has strongly backed calls to cut Iranian oil imports and earlier reductions were hailed by its top business and military ally, the United States, as an example to other countries. (Editing by Richard Pullin)