NYMEX oil futures settle lower as macroeconomic worries cap upside move
New York (Platts)--7Dec2012/359 pm EST/2059 GMT
NYMEX January crude and ICE Brent futures settled lower Friday as
bullish headline numbers on US unemployment were not enough to keep oil
futures from weakening on macroeconomic concerns.
January crude settled 33 cents lower at $85.93/barrel, while ICE January
Brent ended the day down 1 cent at $107.02/b.
In products, NYMEX January heating oil settled 2.79 cents lower at
$2.9153/gal; January RBOB settled up 5 points at $2.5974/gal.
Article continues below...
Daily futures podcast
Listen to today's end-of-day snapshot podcast about the oil futures market. Every weekday, Platts London reporters record a brief update in the middle of the EMEA day. Platts New York reporters post an end-of-day podcast. Follow @PlattsOil on Twitter to find links to the daily snapshot podcasts.
While headline numbers from the US employment report for November, which
showed a drop in the unemployment rate to a four-year low, were seen as a
bullish surprise for the marketplace, crude futures failed to advance.
The US unemployment rate dropped to 7.7% in November as the US economy
added a stronger-than-expected 146,000 jobs.
Kyle Cooper, analyst at IAF Advisors, said that while the headline
numbers of the report were bullish, a deeper look into the data wasn't as
"We are seeing a continued deterioration of the participation rate,
which is about people looking for jobs," Cooper said. "Those people when
asked if they are searching for a job answer 'no' and then they are not
considered part of the workforce so when you look at the drop in
unemployment, it is more about people not looking for a new job."
Also, European growth remained a concern. That was underscored by the
Bundesbank's updated forecast for German prospects, "with the region's largest
economy clearly held in check by even weaker performance from its neighbors,"
Tim Evans, energy analyst at Citi Futures Perspective, said in a note.
The Bundesbank cut its forecast for German GDP and now projects a 0.4%
gain for 2012, versus a previous forecast from June of a 0.9% gain. For 2013,
a 0.5% increase in GDP is expected, down from a previous 1.7%.
Meanwhile, the Thomson Reuters/University of Michigan preliminary US
consumer confidence index for December fell to 74.5 -- the lowest reading in
The still-looming US budget also remained at the forefront of the
market, keeping the oil complex choppy throughout the session.
"The public has been clearly alarmed by the news reporting on the
fiscal cliff issues, although polling also shows confusion on that point,
with the general public tending to think that going over the cliff would add
to the deficit rather than shrink it," Evans said.
--Alison Ciaccio, email@example.com
--Edited by Kevin Saville, firstname.lastname@example.org