Jobs report weighs on oil

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IOL pic oct28 oil barrels . .

Tokyo - Oil prices were mixed in Asian trade on Monday following a disappointing US jobs report, but fears of another severe storm in the United States boosted demand for heating fuel, analysts said.

New York's main contract, West Texas Intermediate (WTI) for March delivery, gained 13 cents to $100.01 and Brent North Sea crude for March eased 25 cents to $109.32.

The US economy added only 113 000 jobs in January, after a paltry 75 000 in December, according to the labour department's survey of business establishments. Analysts had expected 175 000.

But a separate household survey showed the unemployment rate dropped for the third consecutive month, to 6.6 percent from 6.7 percent in December.

The labour force participation rate improved, though still at a historically low level, to 63.0 percent.

“Looking at the jobs data and how the equity and bond markets have responded... some of the investors were actually focused on the bright spots like the higher participation rate,” Desmond Chua, market analyst at CMC markets in Singapore, told AFP.

News that another winter storm was poised to hit the United States also gave support to WTI prices, helping it breach the psychological $100 level.

Last week, a state of emergency was declared in New Jersey and New York, where dwindling reserves of salt - used to melt snow and road ice - was a problem.

“The possibility of another winter storm has stoked the demand (for heating oil) over the weekend,” Chua told AFP.

He said that the jobs data renewed optimism that the Federal Reserve might slow down the timetable for winding down its economic stimulus programme.

All eyes will be on Janet Yellen's first official appearance as Federal Reserve boss in the US Congress on Tuesday.

“Investors will watch for her take on the economy, and whether tapering is sustainable at the current pace of job creation,” Chua said. - AFP


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