WTI Futures Fade From 5Mos. High ahead of Key US Jobs Data
8/06 6:52 AM
WTI Futures Fade From 5Mos. High ahead of Key US Jobs Data WASHINGTON, D.C. (DTN) -- Heading into early trading Thursday, oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange moved mixed, with the West Texas Intermediate September contract backing off a five-months high as investors weighed a weaker-than-expected reading on U.S. private sector jobs against otherwise solid gains in overall economic activity, putting renewed focus on today's weekly unemployment claims and Friday's non-farm payroll report. U.S. jobless claims slated for release at 8:30 AM ET by the Department of Labor is expected to show a third consecutive weekly increase in first-time applications for unemployment benefits through Aug. 1. Analysts forecast an increase to 1.442 million new claims in the reviewed week. The trend in labor market reversed sideways in the most recent weeks as coronavirus cases flared up in several U.S. states, causing renewed business shutdowns and pausing re-opening plans. Weekly unemployment figures follow a bearish reading from private payroll provider ADP, showing a mere 162,000 new jobs were added by the private sector last month, with all but 1,000 of those jobs coming from the service sector. Details of the report show professional and business services led the gains with 58,000 new jobs, followed by education and health services at 46,000 while trade, transportation and utilities contributed 41,000 jobs. On Friday, the Bureau of Labor Statistics' U.S. non-farm payroll report is forecast to show a gain of 2 million jobs in July, a sizable decrease from 4.8 million new positions created in June. Any reading below 2 million would be seen as bearish for oil markets, with labor participation key to sustained recovery in oil demand. Otherwise, economic activity in the U.S. service sector expanded at a robust pace in July with the Institute for Supply Management's non-manufacturing PMI rising to a score of 58.1%. The new reading beat market expectations of 55%. Further details of the report, however, revealed Employment Index edged lower from 43.1 to 42.1, indicating private business hire less than in a prior month. Near 7:30 AM ET, the front-month WTI contract dropped 43cts to below $42 bbl and international Brent crude slipped 17cts to trade at $45 bbl. NYMEX ULSD September futures traded 0.57cts lower at $1.2580 gallon and front-month RBOB futures added 0.56cts to $1.2282 gallon. Liubov Georges, 1.646.359.4088, Liubov.georges@dtn.com, http://www.dtn.com. (c) Copyright 2020 DTN, LLC. All rights reserved.
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