Crude-oil futures rallied on Friday as a report showing that the U.S. economy created more jobs than expected in April raised the prospects for energy demand, lifting prices to their highest level in a month.
Crude oil for June delivery +1.33% climbed by $1.62, or 1.7%, to settle at $95.61 a barrel on the New York Mercantile Exchange. Oil futures closed at their highest since April 2 and scored a weekly gain of 2.8%, according to FactSet data.
The acceleration in hiring nudged the unemployment rate down to 7.5% — the lowest level since December 2008.
Demand has been guiding the oil market’s “direction and intensity,” said Michael Peterson, managing director of energy research at MLV & Co., in contrast to the past 24 months or so, during which supply has been the primary driver of global fundamentals.
Separate data Friday showed that the nation’s services industry expanded in April, but at a weaker rate than expected. The Institute for Supply Management’s services index weakened to 53.1%. Factory orders in March also fell 4%.
“While we regard these incremental data points on demand as germane, we do not envision a likely scenario whereby near-term global GDP is anything but lackluster,” he said.
And that means “consensus expectations for the global market are likely to remain centered around modest oversupply,” he said.
“Expected OPEC intervention … may be the driver of the recent rally in oil prices,” he said, referring to the Organization of the Petroleum Exporting Countries.
OPEC’s next meeting is set for May 31. “We would look to changes in sentiment on hawkish/dovish outcomes to factor heavily into price action in the coming weeks,” said Peterson.
In London Friday, the June contract for rival benchmark Brent crude +1.09% tacked on $1.34, or 1.3%, to close at $104.19 a barrel on ICE Futures for a weekly gain of 0.9%.
Elsewhere in the energy market Friday, June natural-gas futures -0.52%edged up by almost 2 cents, or 0.4%, to end at $4.04 per million British thermal units.
Natural-gas prices dropped 7% on Thursday after a report showed that U.S. supplies rose more than expected last week. For the week, the June contract lost over 4% but compared to the May contract’s close last Friday, prices were down 2.7%.
June gasoline +0.51% added 4.5 cents, or 1.6%, to $2.825 a gallon, with the contract down about 0.1% for the week, and June heating oil +0.71% rose 3 cents, or 1%, to close at $2.88 a gallon, up 0.6% from the contract’s close a week ago.