Oil prices off to a weak start to end the first trading week of 2017 as early exuberance over OPEC brushes up against economic sentiments. File photo by Monika Graff/UPI | License Photo
NEW YORK, Jan. 6 (UPI) -- U.S. labor figures supportive of growth sentiments from central bankers and optimism about a price floor did little to kick off an oil price rally early Friday.
The U.S. Labor Department said Friday the unemployment rate of 4.7 percent and the number of those sidelined from the workforce at 7.5 million changed little in December. "Both measures edged down in the fourth quarter, after showing little net change earlier in the year," the report read.
In defending a hawkish rate policy, the U.S. Federal Reserve said in its recently published minutes from December that jobs gains have been "solid" and economic activity was expanding at a moderate pace.
Crude oil prices this week moved in wide swings following a jump at the start of a trading week shortened by the New Year holiday. Oil moved strongly in Asian trading, but settled at the start of trading in New York on what could be perceived as a mixed bag of economic news apart from the unemployment rate.
The price for Brent crude oil was down 0.4 percent to open the day at $56.68 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, was down 0.2 percent to start the trading day at $53.66 per barrel.
The Labor Department said most of the gains in December came from the healthcare and social-services sector. Job growth last year, however, was 2.2 million, less than the 2.7 million recorded in 2015. Average hourly earnings, meanwhile, increased 2.9 percent last year.
An economic survey from the Royal Bank of Canada said a decision by members of the Organization of Petroleum Exporting Countries to trim production in an effort to balance the market had put a floor price under crude oil.
"We still subscribe to the view that slow and steady wins the sustainable recovery and overall, we expect prices to trend mostly sideways over the coming months," the report read.
Meanwhile, an economist at the Federal Reserve Bank of Dallas said there were signs of economic strain emerging despite the sentiment building around the labor sector. Anton Cheremukhin, a senior economist at the bank, described last year's contraction for the energy sector as a "small shock" to the broader economy.
There are few indications to suggest a recession is right around the corner, he said, but remains in a "fragile state."