Oil Price Breakout, Signaling Commodities Uptrend
Benchmark crude for May delivery was up 80 US cents to US$85.67 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract climbed up US$1.11 to settle at US$84.87 on Thursday following a gain of US$1.39 on Wednesday. Global oil trading was closed for the Good Friday holiday.
Oil broke out of its multi-month trading range today. Oil bulls are hoping this is the start of another run higher, while most consumers are probably thinking "not again."
Crude has jumped from US$69 a barrel in early February on expectations a growing US economy will eventually spark higher oil consumption.
On Friday, the US Labour Department said employers added 162,000 jobs in March, the largest job gain in three years. The unemployment rate stayed at 9.7 per cent for the third straight month.
'The market was positive before but now it's been confirmed,' said Clarence Chu, a trader with market maker Hudson Capital Energy in Singapore. 'If the job growth can be sustained for several months, we'll definitely see crude demand pick up.'In other Nymex trading in May contracts, heating oil rose 2.09 US cents to US$2.2376 a gallon, and gasoline gained 2.10 US cent to US$2.3442 a gallon. Natural gas jumped 1.5 US cents to US$4.101 per 1,000 cubic feet. In London, Brent crude was up 71 US cents at US$84.72 on the ICE futures exchange.
Oil is the leader for all commodities, the following weeks should see the other commodities, including soft commodities, finding reasons to surge alongside oil.