Oil collapses as dollar runs on strong jobs report!
Crude-oil futures dropped Friday, increasing losses from the previous session as a stronger-than-expected U.S. jobs report pushed the dollar higher.
On the New York Mercantile Exchange (NYMEX), crude for delivery in April CLJ5, -1.62% traded at $50.28 barrel, down 0.9% or 48 cents. The contract turned depressing just before the nonfarm payrolls reports, then collapsed further after the numbers released. For the week, prices for the contract were still up 1.1%.
April Brent crude LCOJ5, -0.78% on London’s ICE Futures exchange was down 0.2% or 12 cents, at $60.36 a barrel, trading 3.6% lower for the week.
The U.S. ICE dollar index DXY, +1.32% was up more than 1% following the jobs data release, weighing on crude and other commodities that are traded in dollars. A strong buck makes dollar-denominated commodities more costly for holders of other currencies.
The U.S. economy created 295,000 jobs in February and the unemployment rate dropped by 5.5%, beating a consensus forecast for 238,000 and 5.6%.
“This hawkish data is stoking the probability for interest-rate hikes later in the year in the U.S., hence the dollar is rallying like a mad thing,” said Matt Smith, commodity analyst at Schneider Electric, in a note Friday. “This is providing gale-force headwinds for a crude move higher.”