subject: Oil Jumps On Jobs Data - Lantau International [print this page] Oil Jumps On Jobs Data - Lantau International
Lantau International: In a classic example of how encouraging news can lead to discouraging reactions, soon after the February non-farm payrolls data showed that the economy created 192,000 new, the stock market sold off and oil leapt to a touch under $105 a barrel.
"Generally-speaking, more jobs is good news but not when it means that there's going to be even more demand for oil as a result," said Tony Black head of institutional trading at Lantau International.
With tension in the Middle East and North Africa gathering momentum after a tentative peace agreement foundered and several oilfields in Libya were reportedly damaged, oil prices show no sign of going into reverse. The DJIA and the S&P sold off sharply despite the good news on jobs and the fall in the unemployment rate to 8.9%.
"We're seeing lots of buying in gold and silver but the dollar is mysteriously conspicuous by its absence at the safe-haven party," said a Lantau International analyst.
Investors seeking gold as both a safe haven and a guard against inflation sent prices up above $1,430 an ounce and silver up 3 percent to 31-year highs over $35 an ounce. The yellow metal racked up its fifth consecutive weekly gain on concerns that Libya's escalating unrest could be repeated across the Arab world.
"We believe the spate of revolts in the regions has alerted investors to just how sensitive the price of oil is to supply dynamics after they bought wholesale into the demand destruction argument that gained such misplaced credibility after oil fell from its all time high in summer of 2008," said the "Lantau International" source.
The firm identified BP as a prime candidate for acquisition following the Deepwater Horizon disaster in the Gulf of Mexico and the call has proven prescient since the stock has clawed back most of the value it shed after wild estimates ranging from $100bn in clean up costs to the possibility of bankruptcy were mooted by commentators who, according to the most recent "Lantau International" commodities' sector client update, "really should have known better".
Consensus amongst analysts at "Lantau International" is for a strong oil price right through to year-end where they expect pricing to be in the $100-130 region."
