Oil Bounces Higher on Friday

WASHINGTON, D.C. (DTN) -- Nearest delivered oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange edged higher Friday morning on a better-than-expected U.S. jobs report, lifting market sentiment amid uncertainty regarding U.S.-China trade talks.

West Texas Intermediate May contract shifted $0.46 higher to trade at $62.56 per barrel (bbl), holding just below this week's $62.99 five-month high on the spot continuous chart, while ICE Brent June futures were up $0.33 at $69.73 bbl after briefly topping $70 Thursday. Nymex ULSD May contract traded up 0.74 cents at $2.0208 gallon, while RBOB May futures moved 0.60 cents higher at $1.9459 gallon.

Oil futures were boosted by the sizable gain in the U.S. nonfarm employment in March, while jobless rate remained below the 10-year average rate of 3.8% according to Bureau of Labor Statistics. Federal data showed U.S. economy added higher-than-expected 196,000 jobs last month, sharply higher from the 20,000 new hires in February, driven mostly by gains in professional and technical services. BLS also revised higher employment figures for January and February with combined revisions of 14,000 more new jobs created than previously reported.

Friday's strong report came after lackluster employment data from earlier this week, showing private payrolls expanded by 129,000 last month, while activity in U.S. service sector fell to its lowest level since August 2017.

U.S. stock indexes advanced on the official government report, lifting market sentiment after previous jobs data disappointed. Dow Jones Industrial Average gained 62 points to 26,446.63, while S&P 500 Index was up 0.15%, with both indexes up by more than 1.5% though Thursday's close.

As investors shifted their focus to the bullish development in the U.S. job market, a key uncertainty for investors remain around the U.S.-China trade deal. Meeting between U.S. President Donald Trump and China's Vice Premier Liu He came short of announcing a final trade agreement on Thursday. Despite upbeat tone from both sides after their meeting, major issues continue to hinder the progress according to U.S. trade representative Robert Lighthizer.

The U.S. and China -- the two largest economies in the world -- are engaged in a tariff fight that started last year. The Trump administration imposed additional tariffs on $250 billion in Chinese imports, while Beijing slapped duties on $110 billion of U.S. goods.

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