Business News

Oil prices dip on caution ahead of U.S. jobs data

Latest Update: September 4, 2015 | 197 Views

SINGAPORE: Oil prices eased on Friday as investors turned cautious ahead of U.S. jobs data that is expected to play into the Federal Reserve’s decision on the timing of any U.S. rate hike.

Oil stuck to a narrow range and trading was thin with Chinese markets closed a second day for a holiday to commemorate the end of World War Two.

“There’s been a little bit of up and down and range-bound movement, which has all the hallmarks of a market marking time,” said Ben Le Brun, market analyst at Sydney’s OptionsXpress.

Brent crude for October delivery LCOc1 fell 58 cents to $50.10 a barrel as of 0519 GMT, after ending the previous session 18 cents higher. Brent rose as high as $50.87 a barrel earlier in the session on Friday

U.S. crude for October delivery CLc1, also known as West Texas Intermediate, was down 66 cents at $46.09 a barrel, off the day’s high of $46.85. It settled up 50 cents on Thursday.

“If non-farm payrolls turn out better, oil prices could increase as there would be more bullishness on the U.S. economy,” said Phillips Futures in a note on Friday.

A weak payroll figure could push prices down, causing the WTI and Brent benchmarks to test support at $44.92 and $49.69, respectively, the note added.

U.S. policymakers are likely to use the August jobs data, due for release at 1230 GMT, as part of their assessment on whether to hike rates this year at the next meeting of the U.S. Federal Reserve federal open market committee on Sept. 16-17.

A strong dollar remained a “clear and present danger” for the oil markets, Le Brun said, as it makes commodities priced in the greenback more expensive for holders of other currencies.

Investors are also keeping an eye on U.S. oil rig data due later on Friday for clues on supply. Any drop in rig numbers could bolster oil’s price outlook.

BNP Paribas has cut its Brent price forecast to $56 for 2015 and $62 for 2016 for Brent, and WTI forecast to $51 in 2015 and $56 in 2016. BNP said excess global supplies would prevent a meaningful upside in the first half of 2016.

Rosneft Chief Executive Igor Sechin on Friday said that Russia can increase oil production up to 700 million tonnes per year (14 million barrels per day) and export 300 billion cubic meters of gas to China a year.



Top of the Hour