Oil extends gains in Asia amid slowdown in production
Oil extended gains in Asia Monday as a decline in U.S. drilling pointed to a slowdown in production, but a weak job report in the world’s top economy kept a lid on gains.
Crude surged in New York after data showed the number of active rigs in the United States fell to a five-year low of 614 last week, helping ease concerns over the global oversupply that has depressed prices.
Oil continued to rally in Asia on Monday, although optimism was tempered by poor U.S. unemployment data.
The U.S. Labor Department said Friday that jobs growth in the world’s biggest economy and top oil consumer faltered in September and the labor market weakened across the board.
This stoked concerns about demand for the commodity at a time when growth in mainland China, the world’s number two economy and major energy consumer, is also slowing down.
The U.S. economy added a disappointing 142,000 jobs during the month, well below analyst estimates, and the August jobs data was revised sharply lower to 136,000, surprising analysts.
Analysts said the soft numbers could prompt the U.S. central bank to push back its first interest rate hike in almost a decade, already delayed by China-driven turmoil in global financial markets.
In afternoon Asian trade, U.S. benchmark West Texas Intermediate for November delivery was up 29 cents to US$45.83 and Brent crude for November jumped 23 cents to US$48.36 a barrel.