Oil Rises After Weaker-than-expected U.S. Jobs Data Hits Dollar

Oil prices edged higher on Thursday as the U.S. dollar slipped following weaker-than-expected U.S. non-farm payrolls data.

Published: 02nd July 2015 06:54 PM  |   Last Updated: 02nd July 2015 06:54 PM   |  A+A-

2015-07-02T043423Z_1_LYNXNPEB61054_RTROPTP_3_OIL-ENERGY-OIL

A pump jack is seen at sunrise near Bakersfield, California | File Reuters

LONDON: Oil prices edged higher on Thursday as the U.S. dollar slipped following weaker-than-expected U.S. non-farm payrolls data.

Poll indications that Greek citizens were expected to back a cash-for-reforms deal in a referendum on Sunday added to the bullish momentum, traders said.

Traders were also keeping a close eye on nuclear talks between Western powers and Iran, looking for any sign of a deal to lift sanctions on the oil-rich nation.

Brent futures were trading 60 cents higher at $62.61 per barrel at 1247 GMT. Front-month U.S. crude futures were up 18 cents at $57.14 per barrel.

The payrolls data weighed on the U.S. currency, which in turn lent support to dollar-priced oil. The figures showed U.S. job growth slowed in June and Americans left the labour force in droves.

Oil prices had slumped between 2.5 and 4 percent on Wednesday after a surprise weekly rise in U.S. crude inventories, the first build since April.

The stock increase came on the back of strong U.S. production.

"Overall, production was supported by increased output from the Gulf of Mexico," Barclays said in a note following the publication of the inventories data.

Outside the United States, supply from the Organization of the Petroleum Exporting Countries rose to a three-year high of 31.60 million barrels per day (bpd) in June, up from 31.30 million bpd in May.

"We are going into the second half of this year with a heavily oversupplied fundamental picture which makes any bullish price forecast hard to accept," oil market analysts at PVM Oil Associates wrote.

Other analysts echoed assessments of a fall in prices in the second half of the year.

"When refineries go into fall (autumn) maintenance we expect to see some significant pressure on crude oil and on that basis we expect to see the crude time-spreads under pressure by the end of the third quarter," said Olivier Jakob, analyst at Switzerland-based Petromatrix.

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