Oil clears $81 on better than expected US non-farm payrolls update
Seeking Alpha Analyst Since 2009
Today’s better than expected non-farm payrolls update that came out in the US in mid afternoon cemented crude’s gains, keeping US light, sweet crude well above the US$81/barrel mark, which it captured earlier in the day.
The data form the US Labor Department showed 36,000 jobs lost in February in the world’s largest energy consumer compared to a drop of 50,000-70,000 projected by most surveys, which had a positive impact in the demand outlook.
Oil prices have been under pressure this week after inventories data from both API (American Petroleum Institute) and EIA (Energy Information Administration) showed increases in oil stockpiles, signalling lower demand for crude. On Wednesday, the EIA said that oil stockpiles increased by 4.1 million barrels, while API reported a 2.7 million barrel increase in oil stocks earlier in the week.
Movement in the currency markets also factored in with the US dollar losing ground after the strengthening of the euro following yesterday’s bond issue by Greece, which was overbooked, helping the country raise €5 billion to meet its near term refinancing needs.
April Brent Crude rose to US$79.41/barrel today, while US light, sweet crude climbed to US$81.37/barrel.
Blue chip oil and gas producers were mixed. Cairn Energy (LSE: CNE) was in the lead with a 2% advance. Tullow Oil (LSE: TLW) rose marginally, as did BP (LSE: BP), while fellow supermajor Shell (SLE: RDSB) posted a small loss. BG Group (LSE: BG) also shed less than 1%.
Amec (LSE: AMEC) gained 1.2%, while another oil and gas engineering firm Petrofac (SLE: PFC) lost 2.1%.
Midcaps showed little movement today. Premier Oil (LSE: PMO) was at the bottom of the pile with a 1.6% loss. Dana Petroleum (LSE: DNX), Heritage Oil (LSE: HOIL), JKX Oil & Gas (LSE: JKX) and Salamander Energy (LSE: SMDR) declined marginally. Dragon Oil (LSE: DGO), Melrose Resources (LSE: MRS) and Soco International (LSE: SIA) added less than 1%.
Wood Group (LSE: WG) rose marginally, while fellow services company Wellstream Holdings (LSE: WSM) posted a small loss.
Juniors didn’t show much movement today. Iraq operating Irish oil company Petrel Resources (AIM: PET) was an exception with an 8% advance.
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