Brent Could Break $109 on U.S. Jobs Data
Brent crude oil traded at $107.86 on Friday morning, hovering just below $108 in anticipation of new jobs data from the U.S. set to be released Friday afternoon. The commodity has faced quite a bit of downward pressure in the past week after Hurricane Sandy shut down two thirds of the US' refineries and quashed much of the demand from the number one oil consuming nation.
Brent prices have long been pressured by weakening economies and thus lower demand for oil in the world's top economies. China has released data this week pointing to a recovering economy, and though there is still a bit of doubt, many believe the Chinese economy is on the road to recovery.
In the US and Europe, there is still quite a bit of uncertainty. Although the US has also presented data painting a reassuring picture of its recovering economic health, there is still a lot of skepticism in the market. Today will play a big role in easing investor confidence, as the US will release jobs data on Friday afternoon. Good jobs data implies economic recovery, and in turn, a boost in fuel demand.
Reuters reported that Brent prices could rise to $109.50 if the jobs data is better than expected. On the other hand, the price could drop below $107 on poor results.
In Europe, confidence remains at a low as the region struggles to restructure its banking systems and keep struggling economies like Greece, Spain and Italy from collapsing the eurozone structure. This month officials will decide how to proceed with the next aid installment for Greece and iron out the details for a new centralized banking structure.
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