Enbridge (NYSE:ENB)
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6 Months : From Nov 2011 to May 2012
Oil futures rose sharply Friday after the U.S. government said unemployment fell last month, boosting expectations that demand from the world's biggest oil consumer will improve.
Light, sweet crude for March $1.48, or 1.5%, higher at $97.84 a barrel on the New York Mercantile Exchange. Brent crude on the ICE Futures Europe exchange recently traded $2.35, or 2.1%, higher at $114.42 a barrel.
The difference, or spread, between the two contracts rose to nearly $17 a barrel Friday, its widest level since mid-November.
Futures rallied on the heels of the Labor Department's closely watched nonfarm payrolls report, which said U.S. employers added 243,000 jobs in January. That sent the unemployment rate falling two-tenths of a point to 8.3%, the lowest level since February 2009.
"The jobs data was the catalyst," said Rich Ilczyszyn, chief market strategist at iiTrader.com in Chicago.
The number of new jobs added breezed past expectations. Economists surveyed by Dow Jones Newswires predicted 125,000 new jobs added.
The report was the latest piece of good news for the still-weak labor market in the U.S., where unemployment has fallen from 9.1% since August. High unemployment and the weak economic recovery has squelched demand for crude by keeping employees off the road and curbing demand for products made from oil.
Earlier this week, the U.S. Energy Information Administration said U.S. oil use fell to a 13-year average daily low of 17.7 million barrels a day last week. Overall oil inventories rose by a greater-than-expected 4.2 million barrels for the week, as refineries curbed their operations.
"It's clear that the economic improvement is not translating to increased physical demand for oil," said Tim Evans, energy analyst at Citi Futures Perspective in New York.
Weak demand in the U.S., as well as the fiscal turmoil in Europe, has forestalled any big jump in oil prices this year. Still, futures remain supported by tensions between Western countries and Iran, which has threatened to cut off oil exports to Europe.
The result is that prices have stuck to a narrow range in 2012, holding between $95 to $100 a barrel.
The standoff with Iran has been a major factor behind the widening disparity between Brent and the Nymex contract. Iran supplies some 600,000 barrels of oil a day to the European Union, which along with the U.S. has ramped up sanctions in recent months over Tehran's nuclear program.
In the meantime, oil supplies around the Nymex delivery point are rising again, putting pressure on the contract. Last week, inventories at the oil hub of Cushing, Okla., rose 1.5 million barrels, according to the EIA.
Inventories there could continue to rise. Last week, pipeline operator Enbridge Inc. (ENB, ENB.T) said February nominations on the Chicago-to-Cushing Spearhead pipeline surged to more than four times the pipeline's capacity. It was the first time that nominations exceeded capacity since last March, a spokesman said.
In October, the Brent-WTI spread surged to a record of almost $28 a barrel, due to high U.S. inventories and European supply disruptions, before narrowing to a recent low of under $8 a barrel in December.
Front-month March reformulated gasoline blendstock, or RBOB, settled 4.55 cents, or 1.6%, higher at $2.9144 a gallon. March heating oil settled 6.15 cents, or 2%, to $3.1144 a gallon.
More information on settlements and highs and lows for futures on Nymex and ICE platforms can be found by searching for the following headlines:
Nymex Light Crude Oil Close
Nymex Harbor RBOB Gasoline Close
Nymex Heating Oil Close
ICE Brent Crude Oil Close
ICE Gas Oil Close
-By Dan Strumpf, Dow Jones Newswires; 212-416-2818; dan.strumpf@dowjones.com