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Business Title: Crude Oil Surges, Gasoline Rises to 17-Month High on U.S. Payrolls Report March 5 (Bloomberg) -- Crude oil surged and gasoline rose to a 17-month high after U.S. employment declined less than forecast in February, bolstering optimism that fuel demand will climb in the world’s biggest energy-consuming country. Oil rose as much as 2.3 percent after the Labor Department reported that payrolls dropped 36,000 last month. The total was forecast to fall by 68,000, according to economists surveyed by Bloomberg News. U.S. fuel use, averaged over the past four weeks, was 19.3 million barrels, up 3 percent from a year earlier, an Energy Department report on March 3 showed. “The employment numbers were quite good relative to expectations, so I’m surprised the market isn’t responding more,” said Michael Fitzpatrick, vice president of energy at MF Global in New York. Crude oil for April delivery rose $1.52, or 1.9 percent, to $81.73 a barrel at 10:41 a.m. on the New York Mercantile Exchange. Futures reached $82.07, the highest level since Jan. 12. The contract is up 2.6 percent this week. Gasoline for April delivery increased 4.09 cents, or 1.8 percent, to $2.2746 a gallon in New York. The fuel touched $2.2831, the highest since Oct. 3, 2008. The Standard & Poor’s 500 Index gained 10.47, or 0.9 percent, to 1,133.44. The Dow Jones Industrial Average rose 82.68 points to 10,526.82. “We had a nice spike up on the jobless report,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “Whenever we get above $80 the bids seem to dry up. I will have to see us close above $80 for a few more days before I’m convinced we’re going to test $84.96.” The April oil contract surged to $84.96 a barrel on Jan. 11, the highest since October 2008. Unemployment Rate The U.S. jobless rate held at 9.7 percent in February, Labor Department figures showed. The unemployment rate was projected to increase to 9.8 percent, according to the median of 82 responses from economists surveyed by Bloomberg News. “The figures were better than expected, and that’s boosted oil prices,” said Mike Wittner, head of oil market research at Societe Generale SA in London. “Fewer job losses than forecast is positive in the short term for U.S. GDP, and therefore the outlook for oil demand.” The U.S. grew at a 5.9 percent annual rate in the last three months of 2009, the biggest gain in six years, according to data from the Commerce Department last week. “Everyone seems happy about today’s positive headlines,” said Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington. “It will be interesting to see if this has any impact on what OPEC does on March 17. What King Abdullah thinks is the most important factor.” OPEC Meeting The Organization of Petroleum Exporting Countries is scheduled to meet in Vienna on March 17. Saudi Arabia’s King Abdullah has targeted $75 as a fair price for consumers and producers. The desert kingdom is the world’s biggest oil exporter and the most influential member of OPEC. OPEC will cut shipments 2.3 percent in the four weeks ending March 20, according to consultant Oil Movements. The group will reduce exports by sea in the period by 2.3 percent to 22.87 million barrels a day from 23.42 million in the month ended Feb. 20, the Halifax, England-based tanker-tracker said yesterday. The data exclude Ecuador and Angola. “There’s no shortage of oil,” Sieminski said. “Demand is still tepid and there is plenty of supply. I still think that some point between now and the middle of the year the market will hit some headwinds, which will deflate the price of oil.” U.S. inventories of crude oil climbed 4.03 million barrels to 341.6 million last week, the highest level since August and 5.7 percent above the five-year average for the week, according an Energy Department report on March 3. Brent crude oil for April delivery climbed $1.72, or 2.2 percent, to $80.26 a barrel on the London-based ICE Futures Europe exchange. Futures touched $80.53, the highest level since Jan. 12.
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#1. To: Brian S (#0)
It's not a supply/demand controlled market...
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