OIL PRICES & U.S. JOBLESS
West Texas Intermediate and Brent oils increased after U.S. employment gains exceeded 200,000 for a ninth month and the jobless rate dropped to a six-year low, bolstering the fuel demand outlook.
Crude rose 0.9 percent in New York and 0.6 percent in London. Payrolls advanced by 214,000 in October following a 256,000 gain the prior month that was more than initially estimated, Labor Department figures showed today. The unemployment rate fell to 5.8 percent. Ukraine's military said dozens of tanks and other military vehicles crossed the border into Ukraine from Russia.
"The market is concentrating on the jobs numbers," Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said by phone. "The unemployment rate dropped to 5.8 percent even as the labor force expanded, which implies that more people will be consuming goods and driving. This is all good for demand."
WTI for December delivery rose 74 cents to settle at $78.65 a barrel on the New York Mercantile Exchange. Prices fell 2.3 percent this week and are down 20 percent this year. The volume of all futures traded was 5.2 percent above the 100-day average at 2:52 p.m.
Brent for December settlement gained 53 cents to close at $83.39 a barrel on the London-based ICE Futures Europe exchange. Volume was 10 percent lower than the 100-day average. Prices slipped 2.9 percent this week and 25 percent in 2014. The European benchmark crude traded at a $4.74 premium to WTI, down from $4.95 yesterday.
The median forecast in a Bloomberg survey of 100 economists called for a 235,000 advance in October payrolls. The report showed that the share of the population with jobs rose to 59.2 percent in October, the highest since July 2009.
The U.S. was responsible for 20 percent of the world's oil consumption last year, according to BP Plc's Statistical Review of World Energy released in June.
"The headline jobs number was a little disappointing," Tim Evans, an energy analyst at Citi Futures Perspective in New York, said by phone. "The background data was quite strong. The share of the population with jobs rose to the highest level since July 2009, which is impressive."
Ukrainian forces killed as many as 200 pro-Russian rebels in fighting in Donetsk, the country's Defense Ministry said on its website. The death toll, which couldn't be independently confirmed, is the biggest reported number of troops or fighters killed since the start of a Sept. 5 truce.
Futures surged in March when Ukraine mobilized its army reserves in response to Russia, the world's biggest energy exporter, seizing the Black Sea region of Crimea.
"The struggle between Ukraine and Russia is losing its ability to influence the market," Yawger said.
Oil has slumped into a bear market amid signs that global supply growth is outpacing consumption. Leading OPEC members have resisted calls to cut output even as a surplus develops amid the shale boom in the U.S., which is pumping at the fastest pace in more than 30 years.
The Organization of Petroleum Exporting Countries reduced every forecast for demand for its crude through 2035 except next year's, according to the group's annual World Oil Outlook, released yesterday. Demand for the group's crude may fall to a 14-year low of 28.2 million barrels a day in 2017, its outlook showed. That's 600,000 a day less than last year's projection and 800,000 below the amount required this year.
"Yesterday's OPEC report makes clear that they are pumping a lot more oil than is needed to meet the world's requirements," said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC. "This is going to be tough for them to solve."
Oil will rebound by the second half of next year as supply and demand don't justify the market's collapse and prices are low enough to threaten investment in production, according to OPEC Secretary-General Abdalla El-Badri. The 12-member group, scheduled to meet Nov. 27 in Vienna, is "concerned but not panicking," he said yesterday.
In Libya, where output gains have contributed to rising supply, the Sharara field will resume production "soon," said Mansur Abdallah, director of oil movement at the Zawiya refinery and port yesterday. It was pumping 290,000 barrels a day before being shut as a precaution when gunmen stormed the facility. The country's Es Sider and Mellitah oil ports are closed because of bad weather, three traders with knowledge of matter said.
"The closure of the oil export terminals and the Sharara field are in the background and lending support," Evans said. "This is a reminder of how precarious Libyan supply is."
U.S. crude production expanded to 8.97 million barrels a day through Oct. 31, the Energy Information Administration said on Nov. 5. That's the most in weekly data going back to January 1983, according to the Energy Department's statistical arm.
Gasoline futures climbed 0.51 cent to close at $2.1352 a gallon in New York. Ultra-low sulfur diesel for delivery next month rose 4.08 cents, or 1.7 percent, to settle at $2.4995.
Regular gasoline at U.S. pumps fell to the lowest level since December 2010. The average retail price slipped 0.8 cent to $2.947 a gallon yesterday, according to Heathrow, Florida-based AAA, the nation's biggest motoring group.
WTI may climb next week, a Bloomberg survey shows. Sixteen of 34 analysts and traders, or 47 percent, estimated prices will rise through Nov. 14, while nine respondents predict a decline.
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AN - China National Offshore Oil Corp. (CNOOC) is willing to invest $3 billion in its existing oil and gas operation in Nigeria, the Nigerian National Petroleum Corporation (NNPC) said on Sunday following a meeting with the Chinese in Abuja.
REUTERS - Production at Libya’s giant Sharara oil field was expected to fall by at least 160,000 barrels per day (bpd) on Saturday after two staff were abducted in an attack by an unknown group, the National Oil Corporation (NOC) said.
IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.
IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.