DTN Oil

WASHINGTON (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange settled Monday's session higher, as natural gas and coal shortages in the European Union and Asia underpinned the third straight advance. However, all contracts retreated from intrasession highs, with West Texas Intermediate capped by a strengthening U.S. dollar and prospects of weaker economic growth domestically and internationally.

November West Texas Intermediate futures pared an advance to $82.18 to settle at $80.52 barrel (bbl), up $1.17, and the international crude benchmark Brent contract advanced $1.26 to finish at $83.65 bbl. NYMEX November ULSD futures rallied 4.13 cents to $2.5150 gallon and front-month RBOB futures added 1.17 cents for a $2.3779 gallon settlement.

Despite fears of global economic slowdown, oil futures pushed higher in afternoon trade Monday, sending U.S. crude benchmark to its highest settlement in seven years with investors awaiting fresh data on U.S. inflation and retail sales for September due out later this week.

Following Friday's disappointing jobs report, expectations were tamed for September's consumer price index reading that is seen holding steady 0.3% and at a 5.3% increase on the year. Some of that increase will likely come as a result of jumping energy prices, with crude oil and natural gas prices spiking amid elevated demand and tight supply over the past month. However, even excluding more volatile food and energy prices, the CPI likely still rose at a decade-high 4% annual pace.

According to Goldman Sachs analysts, production bottlenecks and ongoing COVID-19 pandemic will shrink U.S. growth by 0.2% this year to 5.6% this year and 4% in 2022. Shrinking government stimulus and "a more delayed recovery in consumer spending" are the "two challenges" to growth in the medium term, bank analysts wrote in a note to clients on Sunday.

On Friday, the U.S. Department of Labor reported domestic labor market added a less-than-expected 194,000 new jobs in September, the lowest monthly job growth rate since January. Further details of the report showed most job losses took place in the government and public sectors, mainly in schools that might be linked to vaccine mandates and the Delta surge of coronavirus infections. Centers for Disease Control and Prevention shows COVID-19 cases plateaued around mid-September and sustained a downtrend into early October. The unemployment rate, meanwhile, fell below 5%, down 0.4% from the previous month, and the number of unemployed fell by 710,000 from the previous month to 7.7 million.

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