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Friday, May 6, 2011

Oil above $100 as traders eye weak US jobs

Oil prices inched higher on Friday morning after Thursday's record 10% drop, with investors keeping a wary eye on key US jobs data out later in the day.


On Thursday Brent oil posted it second-largest one-day fall on record in dollar terms. Europe's benchmark crude fell by as much as $12 a barrel during the normal trading session, and U.S. crude dropped $10, leading one of the sharpest commodities sell-offs in years.


Benchmark crude for June delivery was up 43 cents at $100.23 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. In London, Brent crude for June delivery was up $1.10 to $111.90 a barrel on the ICE Futures exchange.


Crude would have to stay around $100 for five to 10 days before we see gas prices come down," says a senior analyst at energy trader DTN. He expects seasonal demand to lift prices to as much as $4.20 a gallon, surpassing July 2008's $4.11 record.


A stronger dollar, which makes oil more expensive for investors with other currencies, also helped push crude prices down.
Some analysts expect oil to resume its rise as political unrest in the Middle East and North Africa could spread and threaten to disrupt crude supplies in the oil-rich region.


But others thought that disappointing US jobs numbers could push oil down to $105 a barrel.


The dollar traded slightly down against a basket of currencies ater jumping 1.5% on Thursday, the biggest gain in over six months.

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