The U.S. Non-Farm Payroll was released today and it showed that job growth accelerated in May though it fell below expectations.
This indicates that firms are making some progress filling a record number of openings as the economy powers up.
Payrolls increased by 559,000 last month after a revised 278,000 gain in April, according to Labour Department’s NFP report today. While this figure was below the 650,000 expected, it still indicates robust growth while not exerting excessive pressure on the Federal Reserve to rein in its monetary policies.
Investors have reacted positively to this report as crude oil prices push higher, continuing the recent rally amid growing expectations of an improving fuel demand outlook, particularly by the U.S, the world’s largest consumer, on summer drive expectations.
U.S. West Texas Intermediary (WTI) was up 0.77%, trading at $69.34 a barrel, after settling the previous trading session at its highest level since October 2018 ($69.70). Brent is also up 0.40%, trading at $71.59, after climbing above $72 for the first time since April 2019, as of the time of writing this report.
U.S. crude stockpiles fell more than expected on Thursday in another bullish sign for the market, with data from the U.S. Energy Information Administration showing a draw of just over 5 million barrels last week, bigger than the expected 2.4-million barrel draw.
Earlier this week, both the Organization of Petroleum Exporting Countries and Allies (OPEC+) and the International Energy Agency (IEA) have offered up constructive outlooks for the second half of the year as the global economy recovers from the pandemic.
As stated in previous reports, another factor pushing the market is a slowdown in talks between the United States and Iran over Tehran’s nuclear program, ruling out an immediate increase in the supply of oil by Iranian output.
Gold was also affected by the NFP report as the commodity surged in price by more than $20, to trade at 1,894.25, up 1.12%. The U.S dollar index, which moves inversely with Gold is currently down by 0.45% to trade at $90.105.
For other commodities, Silver is up 1.62% to trade at $27.92, Platinum is up 0.28% to trade at $1,165.60 and Palladium is up 0.46% to trade at $2,839.50, as of the time of writing this report.
There are a number of important data releases expected next week, including OPEC’s monthly market report and the IEA’s monthly oil market report.
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