DTN Oil

WASHINGTON (DTN) -- With the dollar index sagging and equity futures moving higher, oil contracts on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange steadied in early morning trade Friday as investors looked to a key reading on the U.S. labor market for additional clues on the economy's ongoing recovery in the second quarter.

Following step loses Thursday, NYMEX June West Texas Intermediate futures traded little changed near $64.57 per barrel (bbl) and international benchmark Brent for July delivery eased slightly below $68 bbl. NYMEX June RBOB softened slightly to trade near $2.1117 gallon and NYMEX June ULSD futures declined 0.72 cents from a 16-month spot high $2.0278 gallon to near $1.9825 gallon.

The U.S. economy may have added as many as 1 million new jobs in April, although forecasts range between 650,000 to more than 2 million. Accelerated vaccine rollouts combined with state reopenings and renewed travel and leisure hiring is likely to have fueled those gains, alongside the impact of President Joe Biden's $1.9 trillion spending bill.

The most recent jobless claims fell below 500,000 for the first time since March 2020 when the new filings averaged as high as 3 million each week. With large states of New York, New Jersey and California set to fully re-open their economies, the labor market's recovery is likely to accelerate in the coming weeks. Underlying business activity is already growing at the fastest rate in nearly four decades. Th Atlanta's Fed's GDPNow model estimates the economy's output exceeded 13% in the second quarter, with the real personal consumption growth and private domestic investment at 12.5% and 33.5%, respectively.

Limiting that growth, however, is rising levels of inflation and shortages of materials as well as labor. Recent surveys on business activity from the Institute of Supply Management showed operators in manufacturing and service sectors alike struggle to fill open positions.

For oil traders, those dynamics matter because gasoline demand has struggled to break out above 9 million barrel per day (bpd) despite reopenings of large states, like New York and California. The U.S. Energy Information Administration reported Wednesday that gasoline supplied to the U.S. market, a measure for demand, softened to a six-week low 8.86 million bpd in the final week of April, while stockpiles built by 737,008 million bbl from the previous week.

Liubov Georges can be reached at liubov.georges@dtn.co