Oil Rises On U.S. Economic Optimism, Syria Fears
MarketPulse | Oct 02, 2015 07:02AM ET
Oil rose on Friday, pushed higher by fears about escalating violence in Syria and on expectations that data would show economic strength in the United States, the world’s largest oil consumer.
Global benchmark Brent LCOc1 gained 47 cents to $48.16 a barrel by 0324 EDT. The contract had closed the previous session down 68 cents. U.S. crude CLc1 added 74 cents at $45.48 a barrel, after settling 35 cents lower in the previous session.
The oil market was factoring in a risk premium over Syria, where Russia and the United States are conducting bombing campaigns.
The situation was complicated by the arrival of hundreds of Iranian troops in Syria to join a ground offensive in support of government forces, a sign the civil war is turning still more regional and global in scope.
Oil drew support from economic optimism ahead of U.S. data that is expected to show the creation of more than 200,000 jobs in September, said Andy Sommer, senior energy analyst at Axpo Trading in Dietikon, Switzerland.
“It’s a sign that the U.S. economy is solid and robust and that demand from the world’s biggest oil consumer can stay on the strong side,” he said.
The nonfarm payrolls data is due at 0730 EDT.
Fears eased over the possibility of disruption to U.S. East Coast oil facilities by Hurricane Joaquin, limiting price gains.
U.S. crude production unexpectedly rose last week despite a drop in active drilling rigs.
Despite the slight gains on Friday, oil is down more than 1 percent this week, after it fell 24 percent last quarter, with few analysts expecting a significant recovery.
“Fundamentals remain weak,” analysts at ANZ said in a note to clients.
“We continue to see weaker fundamentals drive crude oil prices lower in the short term.”
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