Oil Settles Higher on Friday

NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures settled higher Friday. West Texas Intermediate crude and Brent crude on the Intercontinental Exchange rallied 3% along with rising equities, while the dollar eased following a robust monthly U.S. jobs report and easing tensions in the Korean peninsula.

"The jobs report was good news for gasoline demand ahead of the summer and the situation in North Korea is calming down, which also supported the market," said analyst Phil Flynn at Price Futures.

The Labor Department earlier this morning reported a more-than-expected 313,000 jobs added last month and January data was revised higher even as labor participation rate edged up to 63%.

More important for Wall Street, annual wage gains rose 2.6%, which is moderate and assuaged inflation fears. January's 2.9% wage growth spooked investors and set off a wave of selling pressure last month. This report bodes well for the broader economy and for oil demand going forward, said analysts.

The Dow Jones Industrial Average spiked nearly 400 points, while the S&P 500 index was up over 40 points and Nasdaq 100 was up more than 100 points, with equities trading in correlation with oil futures. The dollar index reversed lower from a better one-week high.

Markets also grew hopeful that a planned meeting between President Donald Trump and North Korean leader Kim Jong Un could ease tensions. Trump said he was prepared to meet Kim in May, in what would be their first summit and could mark a diplomatic breakthrough in a standoff over North Korea's nuclear weapons program.

Other bullish factors included comments by While House advisors that tariffs on imported steel and aluminum announced on Thursday would be flexible, allowing exemptions for Canada and Mexico. Several other U.S. allies in Asia and Europe today lined up to seek exemptions.

"The tariff proclamation was more of a 'let's make a deal' rather than a tariff," Flynn said.

A drop in weekly U.S. oil rigs and continued outage a Libyan oilfield added to the oil futures' rally. Baker Hughes reported that the number of active rigs drilling for oil in the U.S. fell by four rigs this week to 796, marking the first decline in seven weeks.

In Africa, Libya's 70,000 bpd El Feel oilfield remained shut down despite the country's national oil company saying it had reached a deal with its workers to reopen it, Reuters reported.

At settlement, NYMEX April WTI crude oil futures spiked $1.92 to $62.04 bbl, but eased 53cts for the week. ICE May Brent surged $1.88 to $65.49 bbl, up $1.12 for the week. The Brent premium to WTI rose to $3.45.

NYMEX April ULSD futures settled 2.75cts higher at $1.8866 gallon while April RBOB futures jumped 3.66cts to $1.9043 gallon. Both products were little changed versus a week ago.

George Orwel can be reached at george.orwel@dtn.com