Brent crude oil climbed on Monday morning after hiring data from the US was positive enough to give the commodity a boost, but not so positive that investors started worrying about the US Federal Reserve cutting back on its stimulus program. The commodity traded at $104.52 at 6:25 GMT on Monday morning.
Worries that the Fed will cut back on its $85 billion stimulus plan has driven oil prices recently as investors cautiously eye positive data from the US economy. CNBC reported that labor data on Friday was expected to disappoint investors, however the report showed that US employers increased their hiring and the jobless rate was well above its pre-recession levels in May.
Although it beat expectations, the labor data confirmed that the US economy was still in need of the central bank's stimulus money. Some economists are expecting the Fed's support to continue until September, when the nation will likely have the ability to stand on its own two feet.
Oil also found support from worries about supply interruption after Sudan said it may cut oil exports from South Sudan if the nation does not stop backing rebels. The standoff served as a reminder of the unpredictability of geopolitical tension in oil producing countries.
Moving forward crude prices are expected to remain soft as the market is well supplied and demand prospects are bleak. The world's top energy consumer, China, has been plagued by weak economic data which indicated a sluggish recovery. The nation's May exports and domestic activity data have lead many to believe that the nation will continue to struggle throughout the summer.
BY Laura Brodbeck