Oil edges above $107 before U.S. jobs report

 Resize text         Printer-friendly version of this article Printer-friendly version of this article

Oil edged above $107 a barrel on Friday supported by expectations of a recovery in Chinese growth, although concern about economic weakness in Europe and the United States kept prices on course for a weekly decline.

Chinese growth is reviving, leading to some optimism about demand from the world's top energy consumer. Annual growth in factory output, investment and retail sales may have gained pace in November, a Reuters poll showed ahead of figures on Dec. 9.

Brent crude added 24 cents to $107.27 by 1055 GMT, after dropping for four straight sessions. For the week, Brent was down about 3.5 percent, its biggest decline since the week to Nov. 2. U.S. crude fell 11 cents to $86.15.

"The market has given up quite a lot of value this week and a lot of that is due to macroeconomic issues," said Tony Machacek, a broker at Jefferies Bache in London. "It is only really China where you can see any decent sort of upturn."

Economic worries about both sides of the Atlantic have curbed investor appetite for riskier assets, dragging down the Thomson Reuters-Jefferies CRB index, a bellwether for commodities, about 4 percent so far this quarter.

Germany's Bundesbank cut its growth outlook for next year on Friday as the euro zone debt crisis takes its toll on Europe's largest economy, but added that the country would return to its growth path soon.

Adding to the jitters was the political impasse on the U.S. fiscal policy.

Republicans in Congress and President Barack Obama spent much of Wednesday talking up their positions on the "fiscal cliff" and though Obama and Republican House Speaker John Boehner spoke by phone, neither side offered any new compromises in public.

Later on Friday, investors will focus on the latest U.S. jobs report. The non-farm payrolls data for November may show a slowdown in job growth in the aftermath of Superstorm Sandy that disrupted economic activity.

Federal Reserve policymakers are scheduled to meet Dec. 11-12 to review monetary policy. Oil exporter group OPEC also meets next week, on Wednesday, and is not expected to alter output policy.

Investors were monitoring developments in the Middle East where a worsening political crisis in Egypt and conflict in Syria has heightened worries about oil supply from the region.

The violence in Egypt has not affected prices although they could rebound should the market return to a focus on supply risks rather than demand weakness, according to Commerzbank.

"Concerns about demand have currently gained the upper hand," said Carsten Fritsch, an analyst at the bank. "We regard the scale of the price slide as exaggerated and expect prices to recover." (Additional reporting by Ramya Venugopal; Editing by William Hardy)



Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left


SmartScan

Agrivolt has unveiled a new tool in its mission to mitigate stray voltage. They are now offering full time surveillance ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Generate Leads