Oil heats up after jobs report and Syria turmoil

A better than expected Jobs report and Israel attacking Syria's military and weapons instillation has shocked oil out of it recent bearishness. Forget the fact that demand is lousy and supplies at historic highs, it does not matter when Mid-East tensions and economic anticipation overshadows supply and demand. Oil is on a tear and is bringing the products along with it.

Oil got a boost as the world's largest oil consumer seems to have the only economy in the world that seems to be working, or at least not tanking. The U. S. Bureau of Labor showed that employment increased up more than expected in April dropping the jobless rate to 7.5% a four-year low. Non-Farm Payrolls expanded by 165,000 and on top of that we saw an upward revision of a 138,000 jobs increase in March. Oil seemed to believe that this jobs report would somehow reignite energy demand.

Syria is calling it an "act of war.” Over the weekend

Israeli jets pounded Syrian military sites in a pair of bombings. Syria says this opens the door to all possibilities. Fears that the Syrian civil war could spread is putting the risk trade back in oil.

Natural gas once again has acted inversely to oil. Oh sure, we had the bearish report and the calendar is working against it, but at the same time oil is soaring in relation to natural gas once again. Remember that we are going to follow natural gas and observe whether or not it acts as a hedge against oil in the risk-on and risk-off sense. Is natural gas a new safe haven commodity and does it act as a hedge against oil when oil makes a sharp move in one direction or another.

Natural gas did get some supportive news in that the Baker Highs rig count said that natural gas producing rigs hit an 18-year low. Reuters News reports that the number of rigs drilling for gas in North America fell by 12 to 354 in the week to May 03, while oil-directed drilling rigs rose by 22 to 1,403, data from oil services firm Baker Hughes showed on Friday.

One of the big questions for the natural gas market is whether or not the U.S. is going to be a natural gas exporter. Reuters news reports that "President Barack Obama said in Central America on Saturday that the United States might be able to help relieve that region's growing energy demands by exporting liquefied natural gas, a move opposed by some U.S. businesses and environmentalists.

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