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NEW
YORK - Crude oil prices on both sides of the Atlantic rose on Friday as
data showed strong jobs growth in the United States and investors cast
doubt on reports Libya's oil ports were about to reopen. The March US non-farm payrolls report showed ...
Oil jumps on US jobs data, Libya doubt
Picture: BLOOMBERG/DANIEL ACKER
The March US non-farm payrolls report showed 192,000 jobs were added in March in a major test of the argument that the economic weakness of January and February was due to bad weather.
Expectations had been building that an eight-month blockage of Libya’s oil export ports would end after rebels and the government said they were close to an agreement.
The Libyan government said it had seen evidence of "good intentions" at indirect talks with eastern rebels that could lead to renewed exports.
Previous reports of the reopening of ports, however, have proven false and investors suspect there will again be no breakthrough.
"In the oil market it is Libya that is pulling the strings," said David Hufton, managing director of London brokerage PVM Oil Associates.
"High hopes of an imminent settlement with rebels in the east of the country have been punctured," said Mr Hufton.
May Brent crude was up 65 US cents at $106.80 a barrel by 3.09pm GMT. US crude for May gained $1.02 to $101.31 a barrel, after rising as high as $101.63 earlier.
Front-month US crude was set to post its first weekly loss in three weeks.
The spread between Brent and US crude — also known as West Texas Intermediate, or WTI — had narrowed to as low as $4.81 by midweek as Brent lost more than $3 on hopes that Libyan oil would soon be back online. It widened to nearly $6 on Thursday before narrowing again on Friday to $5.49.
"The spread’s in today by about 50 cents, which suggests that concerns about Libyan oil making its way back onto the world market place has kind of run its course, and the focus is back on Cushing oil flowing down to the Gulf Coast," said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut.
The restart of Libya’s eastern oil ports could release about 600,000 barrels per day (bpd) of crude, bumping up the Organisation of the Petroleum Exporting Countries producer’s output from around 150,000 bpd but still far from the 1.4-million bpd it produced last July.
Investors remained cautious after a breakdown in agreements between the Libyan government and rebels earlier this year.
"It first remains to be seen whether the oil terminals in the east of Libya do in fact open in the next few days," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.
"Even if this does happen, however, it is by no means clear whether the previous export volume of 600,000 bpd can be quickly regained," he added.
"It takes time for production to be ramped up and for pipelines to be filled."
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