Oil prices shrug off positive U.S. jobs data

The U.S. president hinted that the federal report on labor numbers for May would be strong about an hour before the official release.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  June 1, 2018 at 10:26 AM
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June 1 (UPI) -- Multilateral trade concerns overshadowed a good U.S. jobs report for the commodities market, with crude oil prices tracking toward a loss on Friday.

U.S. President Donald Trump hinted at a good report on U.S. payrolls before the official release of data from the federal government. About an hour before the report, Trump tweeted that he was "looking forward" to the jobs numbers.

The Labor Department reported the unemployment rate in May dropped below 4 percent, with employers adding another 223,000 to their payrolls last month. That's compared to the 12-month average of 191,000 additions. Earnings, meanwhile, rose 8 cents last month and are 2.7 percent higher than this time last year.

That report, however, was not enough to stave off concerns about the global ramifications of Trump's decision to slap tariffs on aluminum and steel imported from Canada, the European Union and Mexico. According to trade groups, those tariffs would make it harder to build the pipelines necessary to get oil out of North America and on to the global market.

Those constraints are in part leading to a steep discount for West Texas Intermediate, the U.S. benchmark for the price of oil, compared with Brent.

The price for Brent crude oil, the global benchmark, was down 0.4 percent as of 9:15 a.m. EDT to $77.25 per barrel. WTI was down 0.82 percent to $66.49 per barrel.

Tariffs could make the price of American goods more expensive, just as the federal government reported gasoline purchases were driving overall expenses.

On Thursday, Canadian Prime Minister Justin Trudeau made it clear the trade action taken by the United States, one of its top trading partners, was an insult to a long-standing partnership in North America.

"This is not about the American people. We have to believe that at some point their common sense will prevail," he said in a statement. "But we see no sign of that in this action today by the U.S. administration."

Overseas, French President Emmanuel Macron warned that nobody wins in a trade war.

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