U.S. West Texas Intermediate and international-Brent crude oil futures are nudging higher on Friday shortly before the regular session opening and the release of the May U.S. Non-Farm Payrolls report. The news could move crude oil prices because it signals the strength of the economy which will have an impact on future demand.
A bearish NFP report will signal a weakening labor market. This could drive crude oil prices lower because it may be an early indication of lower domestic demand.
In other news, prices are being underpinned early Friday by friendly comments from Saudi Energy Minister Khalid al-Falih. He said at a conference in St. Petersburg, Russia that $60 a barrel was too low to encourage investment in the industry.
Falih said he did not want to boost Saudi production to make up for a lower oil price and that a return to the price-crash environment of 2014-15 was unacceptable.
The markets continue to be locked in on technical support levels that should dictate the direction of the market today along with the NFP report and the outcome of the U.S.-Mexico tariff negotiations.
The key support level for WTI crude oil is $52.70 and for Brent, the important support is $60.32. Furthermore, the market is likely to strengthen over $62.92.
Stronger-than-expected labor market data will also be supportive for crude oil prices as it will improve the domestic demand outlook. Additionally, the U.S. may call off the implementation of tariffs against Mexico scheduled for Monday if the two parties reach an agreement on illegal immigration.
This article was originally posted on FX Empire
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