Bloomberg News

Oil Increases for a Third Day as U.S. Payrolls Climb in February Report

March 09, 2012

Oil climbed for a third day in New York after U.S. employers boosted payrolls more than forecast, bolstering optimism that the world’s largest economy and fuel demand will grow.

Futures rose 0.8 percent after the Labor Department said payrolls increased by 227,000 in February. A gain of 210,000 was projected, according to the median estimate of economists surveyed by Bloomberg News. Crude also advanced as Greece pushed through the biggest sovereign restructuring in history.

“The jobs data is very positive across the board,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas-based energy consultant. “This should increase optimism about the U.S. economy and job market in 2012.”

Oil for April delivery climbed 82 cents to settle at $107.40 a barrel on the New York Mercantile Exchange. Prices advanced 0.7 percent this week and 8.7 percent this year.

Brent oil for April settlement gained 54 cents, or 0.4 percent, to $125.98 a barrel on the London-based ICE Futures Europe exchange.

Some 1.2 million jobs were created in the past six months, the most since the same period ended May 2006. Revisions added a total of 61,000 jobs to payrolls in December and January, government figures showed. The unemployment rate held at 8.3 percent, even as 476,000 more workers sought employment.

The Standard & Poor’s 500 Index was up 0.3 percent at 3:56 p.m. in New York.

Equity Strength

“Oil initially jumped on the jobs numbers,” said Stephen Schork, president of the Schork Group in Villanova, Pennsylvania. “It gave up those gains but then rebounded a few minutes after the stock market opened. Equities are showing strength.”

The trade deficit in the U.S. widened in January to the largest since October 2008 as imports rose to a record high. The gap increased 4.3 percent to $52.6 billion, more than forecast, from a revised $50.4 billion in December, the Commerce Department in Washington said today.

“We had a pretty darn good jobs number,” said Phil Flynn, an analyst at PFGBest in Chicago. “More jobs translate into greater demand. The trade deficit data, with record imports, may be tempering optimism a bit.”

Greece got private investors to forgive more than 100 billion euros ($132 billion) of debt, opening the way for a second bailout. Euro-region finance ministers agreed on a conference call that with the swap Greece had met the terms for a 130 billion-euro rescue package designed to prevent a collapse of the economy.

Greek Restructuring

Greece’s use of collective action clauses forcing investors to take losses under its debt restructuring triggers payouts on $3 billion of default insurance, the International Swaps & Derivatives Association said.

Oil may decline next week as calls for negotiations between nuclear powers and Iran may reduce tension that’s helped bolster crude prices this year, a Bloomberg News survey showed.

Fourteen of 28 analysts, or 50 percent, forecast oil will fall through March 16. Ten respondents, or 36 percent, predicted prices will rise and four estimated there will be little change. Last week, 56 percent of surveyed analysts expected an increase.

Catherine Ashton, the European Union’s foreign-policy chief, issued a statement on March 6 on behalf of China, France, Germany, Russia, the U.K. and the U.S. urging Iran’s nuclear envoy to meet to seek an accord.

Total U.S. fuel demand fell an average 78,000 barrels a day to 18.2 million last week, an Energy Department report on March 7 showed. Consumption was down 7.6 percent from the same week a year earlier.

OPEC Outlook

Prices fell as much as 0.4 percent earlier after the Organization of Petroleum Exporting Countries cut its global oil demand outlook for this year, warning that growth risks may erode consumption as the group pumps the most in three years.

OPEC cut its 2012 oil-demand forecast by 130,000 barrels a day to 88.63 million, according to the group’s Vienna-based secretariat. That means growth will slow to 860,000 barrels compared with 940,000 barrels previously.

Electronic trading volume on the Nymex was 608,801 contracts as of 3:56 p.m. in New York. Volume totaled 705,749 contracts yesterday, 13 percent above the three-month average. Open interest was 1.57 million.

To contact the reporters on this story: Mark Shenk in New York at mshenk1@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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