There was a soft rally for crude oil prices early Friday as investors digest the latest numbers on January payrolls. Photo by Monika Graff/UPI | License Photo
Feb. 3 (UPI) -- Increased geopolitical tensions are adding support to crude oil prices early Friday, though the market remains highly volatile so far.
Crude oil prices moved somewhat higher earlier this week after the White House put Iran "on notice" for a recent missile test. While Iran can lean on emerging European partnerships, President Donald Trump is expected to impose new sanctions on Iran and increase tensions after a modest thaw under the previous administration.
Crude oil prices moved during the week on competing trends in the U.S. labor sector. Private payroll processor ADP reported signs of strength, though short-term figures from the U.S. government reported weakness in the four-week moving average.
For January, the Labor Department reported Friday the overall unemployment rate ticked up slightly to 4.8 percent even as the U.S. economy added 227,000 jobs.
The price for Brent crude oil was up about 0.2 percent about a half hour before the start of trading in New York to $56.68 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, was up 0.25 percent to $53.66 per barrel.
Any broader market rally may depend on how investors read the January labor numbers. Gains were reported in most sectors, though hourly earnings increased by 3 cents in January, against the 6-cent increase in December.
On the energy front, an agreement from the Organization of Petroleum Exporting Countries to trim output in an effort to balance the market seems to be holding. That's competing against slow but steady increase in U.S. oil production as recovering crude oil prices improve North American economics.
The immediate focus may still be on Iran given its proximity to major crude oil export arteries. Nevertheless, that may be balanced by other macroeconomic factors and keep a limit on how high crude oil prices may go.
Olivier Jakob, managing director of Switzerland-based consultant Petromatrix, said in an emailed report that energy markets were still highly uncertain.
"There is still no defined trending momentum in crude oil," he said.
The trajectory for crude oil prices may be influenced later in the day when Baker Hughes publishes weekly data on exploration and production. Any increase would signal growing industry confidence and point to possible gains in oil supplies.