WTI oil futures at $90 after US jobs, stock market gains

6 January 2011 6 January 2011

BonTrade

WTI oil prices bounced back to above $90 a barrel in late trading yesterday as strong gains in US private sector jobs boosted optimism that the US economy was recovering at a faster pace.

Wall Street and commodities markets latched on to the US employment report, which showed the biggest rise in its data which goes back to 2000. Crude oil prices shook off early losses and turned positive after failing to drop below $88 a barrel.

Latest WTI Oil Price

US Light crude oil futures for February 2011 delivery was trading at $90.23 a barrel, 08.15 GMT this morning on the NYMEX.

Both WTi and Brent oil futures contracts fell earlier yesterday after suffering the biggest single day drop since the middle of November. Crude oil prices were initially led lower by a stronger US dollar, which typically weighs on commodities as they become more expensive for buyers using other currencies.

Markets are now awaiting the release of December US non farm payrolls data due out on Friday for further signs the US economy is recovering more quickly than expected.

Traders shrugged off US oil inventory data that showed the fifth straight week of crude stockpile declines, attributing the draw to year-end moves by oil companies to ease tax burdens rather than to rising demand.

On stock markets, the Dow Jones added 31.71 points, or 0.27%, at 11722.89, effectively reclaiming the highs reached at the top of dot com bubble ten years ago.

“As equities rallied, the oil bulls that were on the sidelines came back and prices are bouncing back solidly.” said Gene McGillian at Tradition Energy, Connecticut.