Friday’s employment report was not enough to get traders’ minds off of all of the economic problems that are happing in Europe. Oh sure, the market would love to ignore those pesky little problems in Portugal and Greece, yet with a less than spectacular jobs number, it was impossible to do so. The unemployment rate did fall unexpectedly to 9.7%. That was down from the peak of 10.1% in October. Yet the hope that we would see positive job growth was dashed when the report showed we lost 20,000 jobs. We did see some things that were encouraging though. We saw the so-called under-employment rate fall to 16.5% which was down from its peak of 17.4% last October and from 17.3% in December. We saw some revisions as well but ultimately it was not enough to get our mind off of the troubles in the rest of the world. Oil prices fell hard on the stronger dollar but mainly the falling euro and it was a late rally in stocks here in the United States that probably saved oil from a total breakdown.
In Europe, Dow Jones reported that G-7 financial leaders tried to tamp down continued anxiety about the global economic recovery, with officials promising continued stimulus efforts and European leaders pledging to address public debt problems. Dow says that the debt crisis in Europe, triggered by ongoing problems in Greece and other euro-zone countries, placed a brighter spotlight on the G-7 meeting, prompting European leaders to say they are aggressively monitoring and addressing the debt situation.
"We expect and are confident that the Greek government will make all the necessary decisions," said Jean-Claude Trichet, the European Central Bank president. Trichet added European members of the G-7 will, "continue to monitor closely the implementation of these stability measures."
The G-7 also discussed financial sector regulation and how to have the banking sector help pay costs stemming from the financial crisis, but disagreement remained on exactly how, officials said. U.S. Treasury Secretary Timothy Geithner said G-7 leaders are committed to overhauling financial regulation, "in ways that don't undermine prospects for recovery." Regarding Greece, Geithner said European officials, "have made it clear to us that they will manage this with great care."
Iraq is dreaming big. Iraq’s Oil Minister Hussein Al Shahristani said his country would steadily increase oil production over the next seven years and expects to be OPEC's top producer by the year 2016. Take that Saudi Arabia!
The BBC is reporting that Iran has told the UN's nuclear watchdog it will step up its nuclear program from Tuesday, raising Western fears that it is planning to make a bomb. Its nuclear chief, Ali Akbar Salehi, said earlier that Iran would start enriching uranium to 20% at Natanz, Iran's main uranium enrichment plant. So far the oil market is not that surprised. We have been calling for a move towards $40 for some time still we will see some volatility along the way. The key drivers will be the dollar and the Euro
Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at firstname.lastname@example.org.