Oil Market Update (March 12, 2013)
The price of oil fell on Monday after higher-than-expected jobs growth in the US sparked speculation about an earlier end to the Federal Reserve's loose monetary policy. The US government said employers added 236,000 jobs in February.
While the improved results bode well for economic growth, analysts believe they could also signal an earlier end to the Federal Reserve's bond-buying program, which has been instrumental in propping up the US economy since 2008.
In February, Saudi Arabia increased its crude production to 9.15 million barrels a day, an increase of 100,000 barrels a day from the previous month, an official with knowledge of the country's oil policy told Bloomberg. The official did not want to be identified because the information is reportedly confidential.
Crude delivered from storage caused an excess of supply over production of 10,000 barrels a day in February, the official also said. The increase in output followed January's decline in production to the lowest level since May 2011.By early afternoon on Monday, West Texas Intermediate crude for April delivery was down 44 cents, at $91.60 a barrel, in trading on the New York Mercantile Exchange. Meanwhile, Brent crude was down 74 cents, at $110.13 a barrel, on the ICE Futures exchange in London. Norway's oil wealth fund's value rose 13.4 percent in 2012, following a loss of 2.6 percent in 2011. The fund is now estimated to be worth $670 billion, making it 40 percent larger than the entire Norwegian economy, according to the BBC. "The fund's performance reflects development in global financial markets during 2012," said the fund's CEO, Yngve Slyngstad. Norway's sovereign wealth fund is one of the largest investors in the world and is managed by the country's central government. The UK offshore safety regulator has given oil and gas giant Total (NYSE:TOT) the green light to resume operations at its Elgin-Franklin field complex following a leak that has kept it offline for almost a year.
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