Crude oil futures edged higher in mid-morning trade in Asia Nov. 8, extending gains from the previous session amid a broad risk-on sentiment in financial markets following a strong US jobs report and news of Pfizer’s antiviral drug.
Receive daily email alerts, subscriber notes & personalize your experience.
At 10:10 am Singapore time (0210 GMT), the ICE January Brent futures contract was up $1.03/b (1.24%) from the previous close at $83.75/b, while the NYMEX December light sweet crude contract rose $1.02/b (1.26%) at $82.29/b. Both benchmarks had settled higher by 2.7%-3.1% in the last session Nov. 5.
Financial markets across Asia are being buoyed by a stellar US jobs report that showed the US adding jobs at a faster-than-expected pace, boosting hopes of a quick recovery from the COVID-19 pandemic.
US non-farm payrolls jumped 531,000 last month, the Department of Labor said, beating some analysts’ forecasts of a 450,000 increase.
“Global risk sentiment received yet another boost after Friday’s [Nov. 5] US nonfarm payrolls exceeded market expectations and the October unemployment rate fell to a 19-month low of 4.6%,” OCBC Treasury Research analysts said in a note.
“Asian markets are likely to cheer the better-than-expected US labor market data this morning,” they added.
Also adding to bullish sentiment was news that pharmaceutical giant Pfizer had stopped a trial for a COVID-19 experimental antiviral pill early after it was shown to cut by 89% the chances of hospitalization, or death, for adults at risk of developing severe disease.
This comes as the US on Nov. 8 reopens its borders to vaccinated travelers across the world, boosting the outlook for jet fuel demand as airplanes prepare to take to the skies again.
The latest developments will add to the overall bullish sentiment in oil prices as analysts maintain that oil markets remain in deficit and prices will continue to be supported going forward.
Market watchers also noted that Saudi Aramco had raised its December official selling prices, announced late Nov. 5, for Asia, Mediterranean, Europe and US-bound cargoes as strengthening Asian demand ahead of colder winter months is expected to tighten crude supplies.
“Saudi Aramco raised its official selling price of crude to all buyers across the globe, suggesting demand remains strong. This comes following OPEC’s decision to stick with its scheduled 400,000 b/d increase in output despite consumers saying the current pace is too slow to sustain the post-COVID recovery,” ANZ Research analysts Brian Martin and Daniel Hynes said.
Elsewhere, Vitol’s Asia head Mike Muller said global oil inventories have come down to pre-pandemic levels and may face further tightness as OPEC+ spare capacity nears a critical level by the middle of next year.
“If there are no relaxation of sanctions on Iran, if we continue to see not much coming out of Venezuela and if Libya continues to be troubled, we will very quickly go down to levels [of spare capacity] that cause some people angst,” Mike Muller told a Gulf Intelligence webinar Nov. 7.