SINGAPORE, Oct 2: Oil prices climbed in Asia today ahead of the release of a US jobs report and as a hurricane threatened refineries on the US east coast.
Employment data for September, to be released later today, is important because an improvement in the labour market is a key factor supporting the Federal Reserve’s plan to hike its near-zero interest rates, analysts said.
A rate increase is supportive of the US dollar which would make dollar-priced oil more expensive to weaker currencies, hurting demand and depressing prices.
In late-morning Asian trade, US benchmark West Texas Intermediate (WTI) for November delivery advanced 54 cents to USD 45.28 and Brent crude for November added 44 cents to USD 48.13 a barrel.
Both contracts ended lower after a choppy trading session yesterday.
Analysts expect the jobs report will show the US economy added 205,000 jobs in September and the unemployment rate was unchanged at 5.1 percent, a seven-year low.
Traders are also watching if Hurricane Joaquin would change direction and threaten oil refineries and storage facilities in the US east coast.
“We expect to see traders take positions in the event the hurricane changes path over the weekend. This would likely put some upside for oil prices,” said Daniel Ang, an investment analyst with Phillip Futures in Singapore.
On Thursday, a hurricane barrelled through the Bahamas as an extremely dangerous Category Four storm in the direction of the eastern United States.
It was packing maximum sustained winds of 130 miles (215 kilometers) per hour and could grow even stronger over the next 24 hours, the National Hurricane Center said.
The slowdown in China’s commodities-hungry economy also remains a concern for the oil market but analysts said a sharp deceleration, or hard landing, is unlikely.
“Much of the recent concern was triggered by the collapse in China’s equity market, but this was the implosion of a short-lived bubble and tells us nothing about shifts in the real economy,” research house Capital Economics said.
“With policy stimulus in the pipeline and room to ease further if needed, a pick-up in growth seems most likely in the near term, rather than the slump many are expecting.” (AGENCIES)
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