Oil Prices Rise as Traders Await U.S. Jobs Data

LONDON—Oil prices rose in volatile trade Friday as traders awaited U.S. jobs data for clues about the direction of the dollar, but analysts say the continuing oversupply of crude will prevent any lasting gains.

A weakness in the greenback earlier this week fueled a rally in dollar-priced oil but the crude fundamentals remain weak due to a supply overhang, as major producers have refused to cut output despite prices falling sharply for nearly two years.

"Prices are finding reasons to move upward, however [they will] be unable to sustain [this rise] as fundamentals continue to remain weak," said Daniel Ang, analyst at Phillip Futures.

Brent crude, the global oil benchmark, rose 1% to $34.85 a barrel on London's ICE Futures exchange after falling as low as $33.93 earlier in the session. On the New York Mercantile Exchange, West Texas Intermediate futures were up 1.5% at $32.19 a barrel.

The crude market has been very volatile lately amid uncertainty about when major producers will meet to discuss action to raise oil prices.

"Oil price volatility has been high this week, with [the] Brent price spanning between $32 and $36," said Michael Poulsen, oil analyst at Global Risk Management. "Expect the volatility to continue."

Traders are awaiting the U.S. jobs data released later today for clues about the direction of the greenback. The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, rose 0.1% on Friday.

On Thursday, Saudi Arabia cut prices for its highest-quality crude oil destined for customers in Europe and Asia. The move to lower prices would help the world's largest exporter of crude defend its most lucrative markets against encroachment from rival producers such as Iran, which is ramping up its output now that Western sanctions have been lifted.

"The battle for market share continues to intensify between Organization of the Petroleum Exporting Countries producers," said an ANZ report.

Nymex reformulated gasoline blendstock—the benchmark gasoline contract-—fell 0.2% to $1.03 a gallon. ICE gas oil changed hands at $317.75 a metric ton, down $1.50 from the previous settlement.

Biman Mukherji and Benoî t Faucon contributed to this article.

(END) Dow Jones Newswires

February 05, 2016 06:15 ET (11:15 GMT)

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