WTI Crude Rises a Second Day Amid U.S. Jobs Gain; Brent Advances

Apr 04, 2014 8:43 am ET

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April 4 (Bloomberg) -- West Texas Intermediate crude gained a second day after government data showed the U.S., the world’s biggest oil consumer, added jobs in March. Brent rose, paring a weekly loss amid concern about Libyan exports.

Futures advanced as much as 1 percent in New York, trimming their first weekly decline in three. Employers in the U.S. boosted payrolls and the unemployment rate held at 6.7 percent even as more Americans entered the workforce, Labor Department data showed today. Rebels blocking shipments from Libya’s east said they’re ready to reopen oil ports, signaling a possible recovery in supply from the OPEC nation.

“The most important thing of the day” for the oil market is the nonfarm payrolls data, Hans van Cleef, an energy economist at ABN Amro Bank NV, said by phone from Amsterdam. “The U.S. economy is still doing much better than Europe.”

WTI for May delivery added as much as 95 cents to $101.24 a barrel in electronic trading on the New York Mercantile Exchange, and traded at $101.12 at 1:35 p.m. London time. The contract rose 67 cents to $100.29 yesterday. Prices dropped 0.6 percent this week.

Brent for May settlement rose 39 cents to $106.54 a barrel on the London-based ICE Futures Europe exchange. The contract is down 1.4 percent this week. The European benchmark crude was at a premium of $5.42 to WTI. The spread closed at $5.86 yesterday, widening for the first time in seven days.

Libyan Supply

Payrolls rose 192,000 last month after a 197,000 gain in February that was larger than first estimated, the Labor Department reported today in Washington.

Rebels in Libya’s east indicated that four terminals could be reopened in 24 to 48 hours, Sliman Qajam, a member of the government’s energy committee, said in Tripoli yesterday. Production from the holder of Africa’s largest crude reserves fell to 250,000 barrels a day last month from 1.4 million a year earlier because of unrest, Bloomberg surveys of analysts and producers show.

“The Libyan negotiations are one of those geopolitical situations that has a clear and present impact on oil,” said Ric Spooner, a chief strategist at CMC Markets in Sydney. “The capacity is there, it’s just a matter if it’s going to be turned on or off and it can happen quite quickly.”

OPEC Boost

The Organization of Petroleum Exporting Countries will boost crude exports to meet demand from Asian refineries, according to Oil Movements. Shipments are estimated to climb by 10,000 barrels a day to 23.9 million in the four weeks through April 19, the consultant in Halifax, England, said yesterday. Its data excludes Angola and Ecuador.

“The market was pricing a bit of hope that Libya would restart exports, but whether that will be followed by an actual increase in exports is the big question,” said ABN Amro’s van Cleef. “We’ve seen signals earlier they’d restart, but every time something came in between and they weren’t able to.”

WTI may drop next week amid speculation that U.S. crude stockpiles will increase, a separate Bloomberg poll shows. Eighteen of 28 analysts and traders, or 64 percent, predict futures will decline through April 11 while six respondents forecast a price gain.

Crude inventories shrank by 2.4 million barrels to 380.1 million in the seven days ended March 28, the first decrease in 11 weeks, according to the Energy Information Administration, the Energy Department’s statistical arm.

--With assistance from Ben Sharples in Melbourne.