Oil prices rose to near $103 (U.S.) a barrel Friday as Libyan government
and rebel forces dug in amid fierce fighting while protests restarted
in the capital Tripoli, raising investor fears of protracted oil output
cuts.
By early afternoon in Europe, benchmark crude for April delivery was up
82 cents at $102.73 a barrel in electronic trading on the New York
Mercantile Exchange. The contract fell 32 cents to settle at $101.91 on
Thursday.
In London, Brent crude for April delivery was up 86 cents to $115.65 a barrel on the ICE Futures exchange.
Analysts said Thursday's fall was due to mainly to profit taking. “But
the Libya crisis is still keeping physical markets highly volatile,”
said a report from JBC Energy in Vienna.
On Thursday, rebels bolstered defenses around Libya's second-largest oil
refinery in Brega while government fighter jets bombed nearby the
Mediterranean port city. Libyan leader Moammar Gadhafi's regime
apparently has stepped up its recruitment of mercenaries from other
African countries, with an official in neighboring Mali saying that 200
to 300 men have left for Libya in the last week.
On Friday, protesters renewed marches in Tripoli, the Libyan capital,
calling for Col. Gadhafi's ouster. Last week, similar protests were met
by a brutal crackdown.
President Barack Obama reiterated calls for Col. Gadhafi, who has been in power for 41 years, to resign and leave the country.
Analysts say oil prices could stabilize if the political upheaval that
has swept through North Africa and the Middle East doesn't spread to
other crude-producing countries. About 1 million barrels a day of
Libya's 1.6 million capacity has been shut down because of the crisis.
“As long as it does not spread to the UAE, Kuwait, Qatar or Saudi Arabia
or worsen in Bahrain, Yemen or Iran, oil supplies from Saudi Arabia and
Kuwait should be able to make up shortfalls in Libya,” Cameron Hanover
said in a report.
Traders will also be closely watching the February jobs data due to be
released by the U.S. Labor Department later Friday. Non-farm payrolls
increased 192,000, above market expectations for 185,000 jobs. Data for
December and January was revised to show 58,000 more jobs created than
previously estimated.
In other Nymex trading in April contracts, heating oil rose 1.98 cents
to $3.0691 a gallon and gasoline gained 1.06 cents to $3.0368 a gallon.
Natural gas futures were down 3.7 cents at $3.741 per 1,000 cubic feet.
" USD- Non-farm payrolls and unemployment rate data come out very positive.."..
" We have moved into the expansion phase of the economic cycle and the economy is self-sustaining " ...
U.S. employers hired more workers in February than in any month since
May last year and the unemployment rate fell to a near two-year low,
raising hopes the economic recovery has gathered critical momentum.
Non-farm payrolls increased 192,000,
the Labor Department said on Friday, above market expectations for
185,000 jobs. Data for December and January was revised to show 58,000
more jobs created than previously estimated. The peak of monthly employment last May was when payrolls were being boosted by government hiring for a census.
The unemployment rate dipped to 8.9 per cent, the lowest since April
2009, from 9.0 per cent in January as more people reported finding work.
“We have moved into the expansion phase of the economic cycle and the
economy is self-sustaining,” said Brian Levitt, an economist at
OppenheimerFunds in New York.
Still, February’s bounce in employment after payrolls were depressed by
extreme weather in January is unlikely to sway the Federal Reserve from
its ultra-easy monetary policies.
The jobless rate has dropped 0.9 percentage point since November. The
rate is derived from a survey of households, while the job creation
figure comes from a separate survey of employers. The household survey
showed more people were employed in February.
The unemployment rate is being closely watched by the Fed and could well
determine the timing of the U.S. central bank’s first interest rate
hike. The Fed, which meets on March 15, has held overnight lending rates
near zero since December 2008.
Economists believe the Fed will want to see payroll gains in excess of
200,000 for at least six to nine months and a significant decline in
unemployment before starting to withdraw its massive monetary support
from the economy.
“If we start to add enough jobs, sufficient to lower the unemployment
rate, I think the Fed will feel a little more comfortable in easing off
the throttle,” said Ryan Sweet, a senior economist at Moody’s Analytics
in West Chester, Pennsylvania.
“But right now, the economy is still fragile. There are a number of
potholes that we can hit and the Fed is not going to want to act on
exiting any time soon.”
A surge in crude oil prices above $100 (U.S.) a barrel due to turmoil in
the Middle East and North Africa represents a new headwind for the
economy.
But Fed Chairman Ben Bernanke this week said higher oil prices were
unlikely to steal much from growth or spark broader inflation, as long
they are not sustained.
With the jobless rate far from its natural 5-6-per-cent level and
inflation still short of the Fed’s target of close to 2 per cent,
analysts expect the Fed to complete its $600-billion government
bond-buying program through June to help the economy.
As in previous months, the private sector accounted for all the job
gains in February, with an addition of 222,000 positions. That was up
from 68,000 in January.
Employment in the private service sector, which pulled back in January,
when much of the United States was hit by heavy snowfall, showed solid
growth in February, rising 152,000 from 33,000 jobs in January.
Payrolls in the goods-producing industries saw a weather-related bounce
of 70,000, with construction increasing 33,000 after shedding 22,000
jobs in January. Manufacturing, a sector that is powering the recovery,
added 33,000 jobs.
Government employment fell 30,000, contracting for a fourth straight
month, pulled down by state and local governments, which are under heavy
budgetary pressures.
The average work week was steady at 34.2 hours. Average hourly earnings rose one cent.
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