Oil prices higher on economic outlook

By Pete Southern in Gold and Oil News | February 4, 2011 14:48 |

Oil prices are finishing off a second week of gains Friday (February 4) as the latest round of jobs data is expected to offer hope that the US economy is improving.

Analysts believe that non-farm payroll jobs increased by around 146,000 workers during January, according to a survey of economists. This has led to anticipation that the Labor Department will report that first-time jobless claims fell more than expected last week.

With positive news on the job front, it is widely expected that business and consumer demand for fuel will increase in the US in the coming months. US demand has a big effect on the global marketplace for oil as the nation is the largest consumer of crude oil.

One barrel of light sweet crude oil scheduled for March delivery currently trades at $90.97 on the New York NYMEX. This is up $.43 from Thursday’s settle price at $90.54. The price was as high as $91.20 in earlier trade.

Along with an expected rise in demand, analysts and speculators appear to believe supply of crude oil is likely to be impacted by the ongoing protests in Egypt against the government of President Hosni Mubarak.

The challenge for oil exporters in the region will be the potential disruption of shipments moving through the Suez Canal.

Given the mix of growing demand and questionable supply, some top oil analysts feel that oil prices are currently supported by the $90 level, and upward mobility in the short-term is fairly likely.

Crude oil prices have been aided by a strong euro-dollar in the last two weeks. The dollar moved over $1.38 in early morning Thursday currency trade. However, the euro has since fallen back a bit.

Oil is not the only commodity that is up to close out the week. Gold prices have risen firmly after dropping as low as $1,314.90 per ounce on January 28th. The gold rate is currently $1,349.10, following Thursday’s New York close at $1,355.60.

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