Crude oil futures - Weekly outlook: April 8 - 12

                    New York-traded crude oil futures ended Friday’s session at a two-week low, after a weaker-than-forecast U.S. nonfarm payrolls report for March fuelled fears that the economic recovery is losing momentum, reducing hopes for higher oil demand.



                  Crude Oil traders have long been taking cues from the monthly jobs report, the most-closely followed indicator of U.S. employment, because it offers insight into the economic health of the world's biggest crude oil consumer.  

A deteriorating economy is generally correlated with decreased demand for oil and fuel products like gasoline.

On the New York Mercantile Exchange, light sweet crude futures for delivery in May shed 0.25% Friday to settle the week at USD93.02 a barrel by close of trade.

Nymex oil prices fell to a session low of USD91.97 earlier Friday, the weakest level since March 21. On the week, New York-traded oil futures lost 4.3%, the biggest weekly decline since September 21.

CrudeOil prices came under heavy selling pressure after the U.S. Department of Labor said the economy added 88,000 jobs last month, the smallest increase since last June and far below forecasts for an increase of 200,000. 

The data also showed that the unemployment rate ticked down to 7.6% from 7.7% in February, but the decline stemmed from more people dropping out of the labor force. The labor participation rate fell to 63.3%, the lowest level since 1979. 

But losses were limited as the dismal jobs report eased recent jitters the Federal Reserve would start to withdraw its super easy monetary policy, weighing on the U.S. dollar.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, fell 0.2% to end the week at 82.67.

Dollar-denominated oil futures contracts tend to rise when the dollar falls, as this makes oil cheaper for buyers in other currencies.

Oil prices were lower earlier in the week due to a number of disappointing economic reports from the euro zone and the U.S, while a surge in U.S. crude inventories to the highest level since 1990 further weighed.

In the week ahead, investors will be awaiting Wednesday’s minutes of the Fed’s March policy meeting for further hints on the future of its monetary policy.

Market participants will also be watching data on industrial production from Germany and the euro zone amid concerns over the deteriorating economic outlook for the region.

Oil traders will also be looking ahead to a flurry of Chinese economic reports due later in the week to further gauge the strength of the world’s second largest economy. 

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for May delivery tumbled 1.9% Friday to settle the week at USD104.35 a barrel. Earlier Friday, Brent prices fell to a session low of USD103.64 a barrel, the weakest level since July 26.

The London-traded Brent contract lost 5.25% over the week, while the spread between the Brent and the crude contracts narrowed to USD11.33 a barrel, the smallest gap since June.

The spread between the two contracts continued to trade near a nine-month low, due to an improving production outlook in the North Sea and amid growing concerns over the euro zone’s economic outlook. 

At the same time, U.S. oil stockpiles at Cushing, Oklahoma, the delivery point for Nymex oil futures, are declining as new pipelines relieve a supply glut there. 
Courtesy : Investing.com