Oil prices lower ahead of key US jobs data
SINGAPORE – Oil prices dipped in Asian trade Friday as investors keep an eye on Egypt while also awaiting US jobs data that could provide a clue to when the Federal Reserve will end its massive stimulus program, analysts said.
New York’s main contract, West Texas Intermediate (WTI) light sweet crude for delivery in August, was down 26 cents at $100.98 a barrel in morning trade, while Brent North Sea crude for August fell 14 cents to $105.40.
US markets were shut for the Independence Day holiday on Thursday.
“Trading is slow today as investors look to the US jobs data Friday for signs of when stimulus tapering may begin,” Kelly Teoh, market strategist at IG Markets in Singapore, told AFP.
The Labor Department this week already said new claims for unemployment compensation, a signal of the pace of layoffs, fell to 343,000 in the week ending last Friday, 5,000 below the previous week.
The news pointed towards a positive result for the broader non-farm payrolls figure. However, while a strong result would indicate a pick-up in the US economy it could also signal the Fed will begin scaling down its $85-billion-a-month bond-buying scheme sooner rather than later.
The risk of prolonged unrest in Egypt after its army overthrew and detained President Mohamed Morsi continues to support prices, analysts said.
The country’s chief justice Adly Mansour was sworn in as interim president Thursday as the army rounded up the leadership of Morsi’s Muslim Brotherhood.
“Investors continue to watch the situation in Egypt closely, but there doesn’t seem any conviction for them to drive the kind of gains in previous days at the moment,” Teoh said.
While not a major crude exporter, Egypt is home to key oil choke points such as the Suez Canal and the Sumed Pipeline.