Crude Dips Lower, All Eyes on U.S. Nonfarm Payrolls

Crude oil has posted slight losses on Friday. Currently, U.S. crude oil is trading at $50.56, down $0.53 or 1.05% on the day. Brent crude oil is down sharply, trading at $54.60, down $0.54 or 0.98%.

Crude Pressing on $50 Level, NFP Next

It was barely a month ago that U.S. crude was at the lofty $65 level, but things have gone south in hurry. Crude sank 15.7% in January and has fallen another 2% in February. Earlier in the week, crude broke below the symbolic $50 level and is darting back-and-forth around this line.

U..S employment releases have sparkled so far this week. On Wednesday, ADP nonfarm payrolls indicated that the economy gained 291 thousand jobs, crushing the estimate of 157 thousand. The ADP report found that the increase in jobs was well-balanced throughout the economy, with solid gains in manufacturing, services.

There was more good news on Thursday, as unemployment claims fell to 202 thousand, down sharply from 216 thousand in the previous release. This marked the lowest level since April 2019. Next up is nonfarm payrolls, which should be treated as a market-mover. The forecast stands at 163 thousand, above the previous release of 145 thousand, but well below the ADP release. We’ll also get a look at wage growth, a key indicator of the strength of the labor market. The forecast for January stands at 0.3%, compared to the gain of 0.2% in December.

Technical Analysis

Crude was marked by choppy trading on Thursday and this could continue on Friday, with resistance and support barriers close by. The line of 51.00 remains relevant and is an immediate resistance line. This is followed by resistance lines at 52.00 and 53.50. On the downside, there is pressure on support at 50.00. Below, we find support at 49.00, which has held since January 2019.