Oil sees jobs number supporting energy demand

In The Zone!

The U.S. jobs report was just right. Strong enough to suggest decent energy demand but not enough of a blockbuster that may force the Fed to hurry up and taper. The U.S. added 175,000 jobs, better than expected but not exactly blow out number.  Add to that some great data out of Japan as Shinzo Abenomics looks like is perking things up.  Japan revised first quarter growth to 1% that may soar even higher going forward inspired by a wave of money printing.

Brent crude also was boosted by a combination of North Sea disruption and export halts from the Sudan.  Tensions between rebels have cut off supply from the South. Offsetting those fears are concerns about demand. Dow Jones reports "that preliminary crude-oil import data showed Chinese demand down 6% on-year or May as total exports grew at the slowest rate in almost a year amid lackluster demand from major trade partners Europe and the U.S."

Gas prices in the Midwest are still a nightmare but talk that BP Whiting will start coming back slowly may start to ease prices.  Nat Gas is under pressure in the short term but the long term demand story is still in place. Reuters news reports "Southern California Edison, a unit of California power company Edison International , decided  to permanently retire the San Onofre nuclear power plant, forcing California to find other electric sources to help keep the lights on in the future.

Both units have been shut down safely since January 2012 following a small radioactive leak in a tube inside a steam generator manufactured by Japanese engineering firm Mitsubishi Heavy Industries Ltd Reliability regulators said California is already dealing  with "operational challenges" due to the reactor shutdowns and  noted a prolonged or extreme heat wave could force the state's  grid operator to impose rolling blackouts in the San Diego and  Los Angeles areas to maintain system integrity.

About the Author
Phil Flynn

Senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at pflynn@pricegroup.com. Learn even more on our website at www.pricegroup.com.

 

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