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Oil Exceeds $70 As Brent Settles

A worker looks at a pump jack at an oil field Buzovyazovskoye owned by Bashneft company north from Ufa, Bashkortostan, Russia, July 11, 2015. (File Photo: Reuters/Sergei Karpukhin)
A worker looks at a pump jack at an oil field Buzovyazovskoye owned by Bashneft company north from Ufa, Bashkortostan, Russia, July 11, 2015. (File Photo: Reuters/Sergei Karpukhin)
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Oil Exceeds $70 As Brent Settles

A worker looks at a pump jack at an oil field Buzovyazovskoye owned by Bashneft company north from Ufa, Bashkortostan, Russia, July 11, 2015. (File Photo: Reuters/Sergei Karpukhin)
A worker looks at a pump jack at an oil field Buzovyazovskoye owned by Bashneft company north from Ufa, Bashkortostan, Russia, July 11, 2015. (File Photo: Reuters/Sergei Karpukhin)

Oil prices reached jumped to their highest in years despite warnings that the 13 percent increase of crude oil could end soon.

Brent crude futures settled 6 cents higher at $69.26 a barrel, after hitting $70.05 a barrel during the session, its highest level since November 2014. Brent’s settlement still represents a three-year closing high amid signs of tightening supply in the United States.

Brent has gained 5 percent since the beginning of the year, picking up from its late-year surge.

US West Texas Intermediate (WTI) crude futures settled at $63.94 a barrel, up 37 cents, the highest since December 2014.

On Wednesday, the US Energy Information Administration said crude inventories fell almost 5 million barrels to 419.5 million barrels last week. Production slowed by nearly 300,000 barrels per day.

The decrease is expected to be short-termed which, according to analysts, is attributed to colder-than-usual weather across the United States last week. This is also suspended production in North America.

UAE Energy Minister and OPEC President Suhail al-Mazrouei said he expects the market to balance in 2018 and that the producer group is committed to its supply-reduction pact until the end of this year.

“OPEC is committed to what they have decided when we met in November (2017)...to continue this for a full year,” Mazrouei said in Abu Dhabi.

He added that more time is needed to achieve a full balance between oil supply and demand, as he expects market balance to be achieved in 2018 but more time is needed to drain the supply overhang.

Mazrouei also stated he was not worried about a supply shock due to the crude output declines in Venezuela and political unrest in Iran.

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US Job Growth Surges in September, Unemployment Rate Falls to 4.1%

A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo
A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo
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US Job Growth Surges in September, Unemployment Rate Falls to 4.1%

A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo
A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo

US job growth accelerated in September and the unemployment slipped to 4.1%, further reducing the need for the Federal Reserve to maintain large interest rate cuts at its remaining two meetings this year.
Nonfarm payrolls increased by 254,000 jobs last month after rising by an upwardly revised 159,000 in August, the Labor Department's Bureau of Labor Statistics said in its closely watched employment report on Friday.
Economists polled by Reuters had forecast payrolls rising by 140,000 positions after advancing by a previously reported 142,000 in August.
The initial payrolls count for August has typically been revised higher over the past decade. Estimates for September's job gains ranged from 70,000 to 220,000.
The US labor market slowdown is being driven by tepid hiring against the backdrop of increased labor supply stemming mostly from a rise in immigration. Layoffs have remained low, which is underpinning the economy through solid consumer spending.
Average hourly earnings rose 0.4% after gaining 0.5% in August. Wages increased 4% year-on-year after climbing 3.9% in August.
The US unemployment rate dropped from 4.2% in August. It has jumped from 3.4% in April 2023, in part boosted by the 16-24 age cohort and rise in temporary layoffs during the annual automobile plant shutdowns in July.
The US Federal Reserve's policy setting committee kicked off its policy easing cycle with an unusually large half-percentage-point rate cut last month and Fed Chair Jerome Powell emphasized growing concerns over the health of the labor market.
While the labor market has taken a step back, annual benchmark revisions to national accounts data last week showed the economy in a much better shape than previously estimated, with upgrades to growth, income, savings and corporate profits.
This improved economic backdrop was acknowledged by Powell this week when he pushed back against investors' expectations for another half-percentage-point rate cut in November, saying “this is not a committee that feels like it is in a hurry to cut rates quickly.”
The Fed hiked rates by 525 basis points in 2022 and 2023, and delivered its first rate cut since 2020 last month. Its policy rate is currently set in the 4.75%-5.00% band.
Early on Friday, financial markets saw a roughly 71.5% chance of a quarter-point rate reduction in November, CME's FedWatch tool showed. The odds of a 50 basis points cut were around 28.5%.