Crude Oil Rallies to 17 Month High as US Job Data Shines

Crude oil jumped on the first day of trading after the Easter holiday as boosted by strong US economic data, particularly the employment report, and robust market sentiment. The benchmark contract of WTI crude oil rallied +2.06% and settled at 86.62. The contract reached an intraday high of 86.90, the highest level since October, 2008.

US non-farm payrolls increased +162K (consensus: +190K) in March while February's reading was revised -14K form -36K. Private payrolls surged +123K, the strongest gain since May 2007. Unemployment stayed at 9.7% but household employment increased for the 4rd consecutive month. Investors were excited as there are signs of improvement in the US job market.

Added to it were upbeat ISM indices. Manufacturing index improved to 59.6 in March from 56.5 a month ago, while services index also added +2.4 points to 55.4, the highest since May 2006. Oil exporters start raising prices as they see demands are set to improve further. Saudi Aramco, the world's largest state-owned oil company, increased official selling prices for its Extra Light crude oil to customers in the US and Asia for May. Price will be 40 cents higher than April's.

Going back to hard facts - oil inventory, US crude oil inventory has risen for 9 weeks and current level is +6.5% above 5-year average. Although stockpiles for oil products, such as gasoline and distillate, have dropped, they are still holding at very high levels.

Gold strengthened despite firmness in USD. The benchmark contract gained +0.68% to 1133.8. Encouraging US data inevitably raised inflation fear and this helped gold. Others in the precious metal complex also soared. Silver rose +1.27% to 18.12 while platinum and palladium advanced +2.04% and +3.39%, respectively.....Here's the charts!


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Crude Oil Climbs to 17 Month High on Speculation Demand Recovering

Crude oil rose to a 17 month high on speculation global demand will increase as the world economy recovers from recession. A report today in the U.S., the world’s largest oil user, will probably show service industries expanded for a third month in March, according to a survey of economists. Oil prices have established a floor of $75 a barrel, Venezuelan Oil Minister Rafael Ramirez said April 2. There is no need for the Organization of Petroleum Exporting Countries to increase production, he said.

Crude oil for May delivery rose as much as 81 cents, or 1 percent, to $85.68 a barrel in after hours electronic trading on the New York Mercantile Exchange, the highest since Oct. 9, 2008. It was at $85.62 at 8:10 a.m. in Tokyo. The contract rose $1.11, or 1.3 percent, to $84.87 on April 1. Prices climbed after reports showed Chinese, European and U.S. manufacturing expanded, while pessimism decreased among Japan’s largest industrial companies.

Oil trading resumed today after the exchange closed on April 2 to mark the Good Friday Easter holiday. A Labor Department report that day showed the U.S. economy gained 162,000 jobs in March, the most in three years, buoyed by 48,000 temporary workers hired by the government to conduct the census. Oil traded within a range of $68 to $84 a barrel in the six months ended March 30. Prices climbed the past two months as improved investor confidence lifted world equity markets and U.S. refining climbed from a 16 month low.....Read the entire article.

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