WTI Futures Flat, USD at 2-Month High Ahead of Jobless Claims

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- Nearby delivery month oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange traded on either side of unchanged in early trade Thursday as market participants looked to a lackluster recovery in the U.S. labor market battered by the coronavirus pandemic, with weekly jobless claims to be released by the Department of Labor at 8:30 a.m. ET expected to show only a modest improvement in first-time filings from the previous week.

A modest improvement in the weekly unemployment report could still boost the U.S. dollar, which strengthened to a fresh two-month high 94.62 against its global peers in overnight index trade. Market consensus calls for new filings for unemployment insurance to have declined to 843,000 from 860,000 during the week ended Sept. 19, and for continued claims -- the number of people collecting unemployment benefits for consecutive weeks -- to decrease to 12.339 million from 12.628 million.

Despite continued week-on-week improvement in the labor market, U.S. economy has so far been able to only recoup only about half of the 22 million jobs lost back in March and April.

Current unemployment rate improved to 8.6% from the 14.7% in April, according to the latest estimates from the U.S. Labor Department. Federal Open Market Committee projects the rate to fall further to 7.6% by year's end, provided more government stimulus is passed by Congress.

In congressional testimony this week, Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin said before the House Financial Service Committee that although the economy is rebounding, more government help is needed for "continued healing."

Mixed moves in the oil market come despite government data released Wednesday showing U.S. crude oil inventories declined 1.64 million barrel (bbl) from the previous week to the lowest level since April at 494.41 million bbl. Other parts of the report were also bullish, including weekly declines in gasoline and distillate inventories and a slight increase in implied demand for gasoline.

In early trading, NYMEX November WTI traded little changed at $39.98 bbl. The ICE November Brent contract is hovering around $41.85 bbl, with the December Brent contract at a $0.48 premium to November delivery. NYMEX October ULSD futures slipped 0.35 cents to $1.1040 gallon, and front-month RBOB futures softened to $1.1798 gallon.

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

Liubov Georges