Middle-east Arab News Opinion | Asharq Al-awsat

Oil rises ahead of U.S. payrolls, Libya conflict - ASHARQ AL-AWSAT English Archive
Select Page

LONDON, (Reuters) – Oil prices rose on Friday, with Brent nearing $118, as investors anticipated U.S. payrolls data later in the session will confirm the improving economic outlook of the world’s largest oil importer.

Fighting in Libya, where Muammar Gaddafi’s forces appear to have regained the upper hand, also supported crude prices as the prospect of a drawn-out conflict reduced expectations of lost Libyan oil returning to the market in the near future.

Brent futures for May delivery rose 19 cents to $117.55 by 10:01 a.m., close to the highest level in almost four weeks. U.S. crude futures were up 35 cents to $107.07 after earlier hitting $107.65, an intraday peak last touched in September 2008.

“In the past two days, the financial markets have been the main driver of higher crude oil prices, but in the back of every investor’s mind there is the unrest in the Middle East and that is supporting the market,” said ANZ Bank analysts Serene Lim.

Oil prices gained traction in the second half of this week after a report on Thursday showed U.S. jobless claims fell last week and data pointed to improving employment in the Midwest.

A Reuters poll suggested the U.S. non-farm payrolls data for March, due at 1:30 p.m., would show a second straight month of solid job growth, adding 190,000 jobs. A rise would imply the labour market has turned a corner after lagging the broader economic recovery.

While improving economic performance is lifting industrial demand for energy in the U.S., high prices at the pump are damaging consumer confidence and capping gasoline demand.

LIBYA, MIDDLE EAST TURMOIL

Libyan rebels cheered the defection of the foreign minister on Thursday as a sign Gaddafi’s rule was crumbling, but U.S. officials warned he was far from beaten and made clear they feared entanglement in another war.

But analysts warned it was doubtful Libyan crude would reach world markets on a sustained basis because of the risk of loading cargoes and said recent advances by government troops were bullish for oil prices.

“This means the likelihood of a return to some normalcy in terms of oil production is pushed back somewhat further, as investors, instead, start to discount the more troubling scenario of a bloody quagmire setting in, meaning that 1.1 million barrels a day of oil exports could be sidelined indefinitely,” said MF Global analyst Edward Meir in a note.

Bahrain has stepped up arrests of cyber activists and Shi’ites and investors will also keep a close eye on events in Syria and Yemen. The conclusion of Friday prayers is a favoured time for protests in the region.

Reuters technical analysis suggests Brent will continue to rise towards $119.79 as a short-term uptrend pointing to $123.46 per barrel has been established, although there is a minor resistance zone between $118.37 and $118.50.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

More Posts

Follow Me:
FacebookGoogle PlusYouTube