Increased
geopolitical tensions are adding support to crude oil prices early
Friday, though the market remains highly volatile so far.
Crude oil prices moved somewhat higher earlier
this week after the White House put Iran "on notice" for a recent
missile test. While Iran can lean on emerging European partnerships,
President
Donald Trump is expected to impose new sanctions on Iran and increase tensions after a modest thaw under the previous administration.
Crude oil prices moved during the week on competing trends in the U.S. labor sector. Private payroll processor ADP reported
signs of strength, though short-term figures from the U.S. government reported weakness in the four-week moving average.
For January, the Labor Department reported
Friday the overall unemployment rate ticked up slightly to 4.8 percent
even as the U.S. economy added 227,000 jobs.
The price for Brent crude oil was up about 0.2
percent about a half hour before the start of trading in New York to
$56.68 per barrel. West Texas Intermediate, the U.S. benchmark price for
oil, was up 0.25 percent to $53.66 per barrel.
Any broader market rally may depend on how investors read the
January labor numbers.
Gains were reported in most sectors, though hourly earnings increased
by 3 cents in January, against the 6-cent increase in December.
On the energy front, an agreement from the
Organization of Petroleum Exporting Countries to trim output in an
effort to balance the market seems to be holding. That's competing
against slow but steady increase in U.S. oil production as recovering
crude oil prices improve North American economics.
The immediate focus may still be on Iran given
its proximity to major crude oil export arteries. Nevertheless, that
may be balanced by other macroeconomic factors and keep a limit on how
high crude oil prices may go.
Olivier Jakob, managing director of
Switzerland-based consultant Petromatrix, said in an emailed report that
energy markets were still highly uncertain.
"There is still no defined trending momentum in crude oil," he said.
The trajectory for crude oil prices may be
influenced later in the day when Baker Hughes publishes weekly data on
exploration and production. Any increase would signal growing industry
confidence and point to possible gains in oil supplies.
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