Crude Oil Futures Settle Higher as U.S. Jobs Market Improves

NEW YORK--Oil futures rose to their highest level all week Friday, as positive U.S. jobs data lifted hopes for higher oil demand.

Light, sweet crude for April delivery settled 39 cents, or 0.4%, higher at $91.95 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange recently fell 32 cents, or 0.3%, to $110.82 a barrel.

Futures got a boost after the Labor Department said employers added 236,000 jobs in February, far more than the 160,000 forecast by economists. Unemployment fell 0.2 percentage point to 7.7%, the lowest level since the end of 2008.

The data is closely watched in the oil market because the health of the job market in the U.S.--the world's biggest oil consumer--is closely correlated with crude-oil demand.

"This number is a big step," said Carl Larry, head of the oil-trading advisory firm Oil Outlooks and Opinions. "I don't think anybody expected that."

Futures were lower prior to the 8:30 a.m. EST data, then pared their losses throughout the day to end the session in positive territory. Market observers said a late-session rally in the gasoline market also helped pull crude-oil prices higher.

"Crude markets were definitely following the gasoline move today," said Michael Truscelli, broker at oil options brokerage Paramount Options in New York. "There was a lot of interest at the end of the day."

Front-month April reformulated gasoline blendstock, or RBOB, settled 8.02 cents, or 2.6%,, higher at $3.2035 a gallon.

A steadily improving jobs market has buoyed the oil market in recent months, although steadily rising domestic production and uncertain global demand has kept prices in check.

Oil futures failed to keep up with the sharp rally staged by equities, as the payrolls data sent investors snapping up another asset: the U.S. dollar. A stronger dollar typically weighs on oil prices because it makes the dollar-denominated commodity more expensive for holders of other currencies.

The ICE Dollar Index, which tracks the greenback against a basket of currencies, shot to its highest level since early August, recently rising 0.9% to 82.804.

April heating oil settled 0.46 cent, or 0.2%, lower at $2.9749 a gallon.

Copyright (c) 2012 Dow Jones & Company, Inc.

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AWE Sees Revenue Increase, HSE Measurement Improves

AWE posted Wednesday a rise in revenue and production volume, and an improvement in its health and safety (HSE) measurement for the quarter ended Dec. 31, 2012.

In its quarterly report, AWE noted that sales revenue for the three months to Dec. 31, 2012, was at $80.6 million, up 13 percent from the previous quarter. The company produced 1.3 million barrels of oil in the same period, up 33 percent from three months ago.

AWE attributed the rise in production mostly to the resumption of output from the BassGas project and a ramp up in drilling activity at the Sugarloaf asset. The BassGas project – located offshore southeast Australia – was shut-in for ten months last year for platform upgrading works. AWE was able to restart production at the BassGas project in mid-October last year. For its onshore Texas-based Sugarloaf project, AWE saw increased oil and gas production through an additional 12 wells which were brought online last year. At present, the Sugarloaf project houses 63 producing wells.

AWE also saw improvements on the HSE front. The company posted zero Lost Time Injuries (LTI) for the quarter ended Dec. 31, 2012.

"Given the nature of our industry, it is important that we remain committed to our goal of zero harm and strive to ensure that our employees are award of safety at all times," AWE's Managing Director Bruce Clement said in a statement.

During the financial year 2011/12 ended June 30, the company recorded six LTIs across its operations. AWE acknowledged that the outcome was unacceptable.

AWE stated in its 2012 report that its key HSE objectives for 2012/13 include: recruiting a corporate HSE manager, developing an integrated HSE management system, implementing a recognition program for business units delivering the best safety performance and establishing systems for sharing best practices.

AWE is maintaining its target of zero LTIs for the financial year 2012/13.

Quintella has reported on the upstream and downstream oil and petrochemicals markets from 2004. Email Quintella at quintella.koh@rigzone.com.

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Oil Futures Rise as Economic Outlook Improves

NEW YORK--Improving economic data from the world's two largest oil consumers and a drop in oil supplies at a key storage hub sent U.S. crude-oil futures higher Thursday.

Traders rallied behind oil after a drop in U.S. jobless claims, coupled with improving Chinese manufacturing activity, suggested that demand for oil and fuel products could be headed higher. New applications for unemployment benefits in the U.S. fell to 330,000 last week, the lowest since January 2008.

"The unemployment claims number really helped," said Peter Donovan, a broker at Vantage Trading in New York. And after a sharp price decline Wednesday, he said, "we were probably due for a little bit of a bounce back."

Light, sweet crude for March delivery settled 72 cents, or 0.8%, higher at $95.95 a barrel on the New York Mercantile Exchange.

The gains helped reverse a $1.01 drop Wednesday due to a cut in the capacity of the Seaway pipeline, which runs to Houston from a supply hub in Oklahoma. The reduced capacity raised concerns that oil supplies will build up in the middle of the U.S., far from refineries along the Gulf Coast. On Thursday, pipeline operators said the capacity cut was due to a major refinery that lowered demand due to maintenance and wasn't the result of problems with the pipeline.

"The market reaction was that the Seaway problem is going to be short lived," said Andy Lipow, president of Lipow Oil Associates.

Brent crude on the ICE futures exchange rose 48 cents to $113.28 a barrel.

The gains Thursday kept oil futures above $95 a barrel for the fifth-straight session. U.S. oil prices have gained 12% since mid-December on an improving economic outlook as well as hopes that expanded pipelines will relieve the U.S. supply bottleneck.

Oil futures were also boosted Thursday by a report from the U.S. Energy Information Administration that showed crude stockpiles at the Cushing, Okla., pipeline hub fell by 500,000 barrels last week after seven-straight weeks of gains.

Total stockpiles at the supply depot rose above 50 million barrels for the first time ever earlier this year.

Surging production from new shale-oil fields in North Dakota, Texas and other states has overwhelmed existing transportation infrastructure, keeping U.S. oil prices depressed compared to prices overseas as pipeline operators try to link up supplies with refineries along the coasts. Storage declines in Cushing, if they continue, would signal that the glut is easing.

Front-month February reformulated gasoline blendstock, or RBOB, settled 2.91 cents higher at $2.8629 a gallon. February heating oil settled 0.83 cent higher at $3.0864 a gallon.

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