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Oil futures rally more than $1 as investors assess Iran deal

Published 04/06/2015, 05:38 AM
© Reuters.  Crude oil futures rally sharply as investors assess Iran deal
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Investing.com - Crude oil futures rallied sharply on Monday, as investors assessed the impact of last week’s Iranian nuclear deal on global supplies.

On the ICE Futures Exchange in London, Brent oil for May delivery jumped $1.44, or 2.62%, to trade at $56.39 a barrel during European morning hours.

Elsewhere, on the New York Mercantile Exchange, crude oil for May delivery rose $1.34, or 2.74%, to trade at $50.49 a barrel.

Meanwhile, the spread between the Brent and the WTI crude contracts stood at $5.90 a barrel, compared to $5.81 by close of trade on Thursday.

There was no settlement in oil futures on Friday as markets were closed for the start of the Easter holiday. Trading activity is expected to remain light on Monday, with markets in Europe, the U.K., China and Australia all closed for holidays.

Oil prices plunged sharply on Thursday after Western powers negotiated a tentative nuclear deal with Tehran, which could add more crude to an already oversupplied market.

However, oil prices have since regained some ground with market experts largely estimating that a ramp-up in Iranian crude exports could take several months.

Elsewhere, the U.S. dollar stabilized against its major rivals on Monday, after coming under pressure on Friday following the release of disappointing U.S. employment data.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.02% to 96.86.

The Labor Department reported Friday that the U.S. economy added 126,000 new jobs in March, the smallest increase since December 2013. Economists had forecast jobs growth of 245,000 last month.

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The surprisingly weak report added to concerns over the outlook for economic growth after other recent economic data pointed to a slowdown at the start of the year.

A slowing labor market could prompt the Federal Reserve to reconsider a planned increase in interest rates. Last month the Fed indicated that the first rate increase could come as soon as June, but added that continued improvement in labor markets would be a key factor it would consider.

Later in the day, the U.S. Institute of Supply Management is to release data on service sector activity as investors look for further indications on the strength of the economy and the future path of monetary policy.

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