Oil complex settles higher on strong US jobs data

New York (Platts)--21Aug2014/549 pm EDT/2149 GMT

The oil complex turned a corner during mid-afternoon US trade Thursday, with NYMEX October crude settling 51 cents higher at $93.96/b.

ICE October Brent settled up 35 cents at $102.63/b. In products, NYMEX September RBOB rallied 3.49 cents to settle at $2.7475/gal. September ULSD rose 1.17 cents to finish at $2.8375/gal.

"I've heard that cash markets are strong in gasoline," Oil Outlooks President Carl Larry said. "I think that the economic numbers have looked good,vand it seems that the market is still struggling with refinery issues and the looming refinery maintenance."

Despite US Energy Information Administration data Wednesday pegging US Gulf coast crude runs last week at an all-time high of 8.74 million b/d, Platts data had shown that at least four fluid catalytic cracking units across three major USGC refiners had issues last week.

Adding to the bullish supply picture is the expectation that Irving's 300,000 b/d Saint John, New Brunswick, refinery is getting ready to go offline in September, Larry said.

Despite the rally, RBOB is likely being held in check by the impending arrival of up to 13 tankers, currently en route to the US Atlantic Coast from Europe. While it is unlikely that all tankers are carrying gasoline or blending components, the flurry of cargoes is set to arrive by the end of August, just in time for Labor Day.

US jobs data Thursday was bullish, with both initial and continuing jobless claims coming in below economists' expectations. Initial jobless claims came in at 298,000 this week. The market also got a boost from strong existing home sales data, which rose to 5.15 million in August from 5.03 million in July.

The Philadelphia Federal Reserve Manufacturing Index rose to 28 for August, up from 23.9.

But economic data had been bearish coming into the US trading day.

Chinese manufacturing data failed to live up to expectations, with preliminary HSBC Manufacturing PMI for China coming in at 50.3 -- a three-month low, according to Smith -- missing a forecasted 51.5.

A reading above 50, however, still points to expansion within the sector.

While Germany's manufacturing PMI data fell, it did beat economists' expectations. Larger Eurozone PMI data missed however, coming in 50.8.

BRENT COULD BOTTOM NEAR $100/B

NYMEX crude was also facing bearish supply pressure, analysts said. US Energy Information Administration oil data released Wednesday showed crude stocks at NYMEX delivery hub Cushing, Oklahoma, rose 1.76 million barrels to 20.16 million barrels last week. This puts Cushing stocks at their highest since the week ended July 11.

"Yesterday's build at Cushing is putting downward pressure on WTI, while Brent is seeing downside as flows in Libya improve and flows in Iraq remain largely unaffected," Smith said.

That said, ICE Brent could be nearing bottom as a weakened physical market has seen bargain hunting among Asian refiners, Citi Futures Perspectives energy analyst Tim Evans said.

"[W]e're also hearing more market chatter that the Brent market may bottom out in the $100 area as cash market demand from Asia for West African barrels may help sop up some of the Brent regional surplus," Evans said.

--James Bambino, james.bambino@platts.com --Edited by Derek Sands, derek.sands@platts.com

© 2014 Platts, The McGraw-Hill Companies Inc. All rights reserved.  To subscribe or visit go to:  http://www.platts.com

http://www.platts.com/latest-news/oil/newyork/oil-complex-settles-higher-on-strong-us-jobs-21112946