WTI Oil Trades Near 14-MoWTI Oil Trades Near 14-Month High on Outlook for U.S. Job Gainsnth High on Outlook for U.S. Job Gains

West Texas Intermediate (WTI) traded near highest price in 14 months and was poised for 2^nd weekly gain on speculation demand will increase in America, the biggest oil consumer of the world. In New York, futures were little unchanged after closing 3^rd July at $101.24 per barrel, the highest since 3^rd May 2012. American employers perhaps created almost as many jobs last month unlike in May. U.S. crude inventories fell by 10.3 million barrels last week, the most this year. Ken Hasegawa, Energy Trading Manager at Newedge Group, Tokyo said oil demand will gradually grow in the 2^nd half with some rebound in economies, particularly in America.

For August delivery, West Texas Intermediate was at $101.03 per barrel in electronic trading on NYME (New York Mercantile Exchange), down 21 cents. Volume of all futures traded was nearly 4 times the 100-day average. Prices have advanced 4.6% this week, set for first weekly close above $100 since last year. There was no floor trading in New York yesterday due to Independence Day holiday.

United States Jobs

For August settlement, Brent was at $105.44 per barrel on London-based ICE Futures Europe exchange, down 10 cents and headed for 2^nd weekly increase. European benchmark grade was at premium of $4.41 to West Texas Intermediate contracts. As per median of 90 estimates from economists surveyed by Bloomberg, American non-farm payrolls perhaps rose by 165,000 workers last month, after climbing 175,000 in May. Labor Department report will perhaps show unemployment rate retreated to7.5%, matching a 4-year low in April. United States accounted for 21% of international oil consumption in 2012 unlike 11% for China, the 2^nd biggest user.

Egypt Turmoil

West Texas Intermediate surged above $100 per barrel this week for the first time since September as political shutdown in Egypt heightened concern that unrest in most crowded Arab country will disrupt and spread regional oil supplies. Egypt’s Army forced Mohammed Mursi from power a year after his election and military appointed interim President, Adly Mansour was sworn in. White House and most leaders in Congress have so far avoided describing the transition as a coup that could cost Egypt over $1.5 billion a year in humanitarian and military aid under United States law.

Egypt controls Suez Mediterranean Pipeline and Suez Canal, through which a combined 2.24 million barrels of oil was shipped from Red Sea to North American and Europe in 2011. International Energy Agency in Paris said Middle East accounted for 35% of international output in first quarter of 2013. OPEC (Organization of Petroleum Exporting Countries) will be boosting crude shipments by 2.3% through late July as driving demand peaks during Northern Hemisphere summer. OPEC that pumps around 40% of world’s oil will ship 24.18 million barrels per day in 4 weeks ending 20^th July.

Technological Strength

West Texas Intermediate’s rally is stalling as prices might have risen too quickly for further gains to be sustainable. The 14-day relative strength index was at 68.2 on 3^rd July. Traders usually sell contracts when reading is above 70, which signals a market is overbought. Futures will perhaps decline next week. 21 of 36 traders and analysts, forecast crude will decrease through 12^th July. 33% or 12 respondents predicted a gain.