NEW YORK (TheStreet) --Oil prices were rebounding Wednesday as European leaders diverted a potential banking crisis and the U.S. jobs number came out better-than-expected.
The December Brent crude contract was rising $1.44 to $99.42 a barrel and light sweet crude oil for November delivery was adding $1.70 to $77.37 after a three-day losing streak for both products.
The markets were shrugging off Moody's downgrade of Italian debt in favor of the French and Belgian governments' decision to guarantee the bad debt of Belgian-French bank Dexia and of course, the better-than-expected expected number from Automatic Data Processing on private payrolls. The European governments' move averted a collapse of the Belgian-French financial institution, leading to a sigh of relief for the markets. The ADP reading found that the private sector added 91,000 jobs from August to September after a downwardly revised 89,000 additional jobs from July to August. The consensus view for September was for an addition of just 75,000 jobs in the U.S. "The market is telling us not to not worry about that the Italian downgrade right now...let's party!" said Summit Energy analyst Matt Smith. PFGBest senior energy analyst Phil Flynn added: "You know things are bad when the market seems to be relieved that Italy was downgraded. 'Is that all?' Such is the fate of the global oil market that is now living and dying with the wild mood swings of perception on the outlook for the stability of the global economy." Crude oil received some extra, fundamental support today with the latest U.S. Department of Energy and American Petroleum Institute data showing a big weekly decrease in crude stockpiles, including those at the over-saturated Cushing, Okla. crude trading hub. Furthermore, shipment cancellations continue in the North Sea because of unresolved production issues. Analysts are warning the markets to not get excited just yet, reminding them that the overall macro picture is still fragile. Consulting firm Challenger, Gray & Christmas for one reported a disturbing 115,730 job cuts for September after it estimated 51,114 layoffs in August. Meanwhile, the SpendingPulse U.S. Gasoline Demand Report for the week ended Sept. 30 says that U.S. motor gasoline demand decreased by 2.9% compared to a comparable week a year ago. This macroeconomic indicator is based on aggregate sales and services activity in the MasterCard payments network. "As we end the month of September and move into the month of October, year-over-year declines in gasoline consumption persist," warns John Gamel, gasoline analyst for MasterCard Advisors SpendingPulse. "Besides elevated prices, the reasons for the persistent year-over-year declines continue to be the lackluster labor market, uncertain economic indicators, as well as fuel efficiency improvements in vehicles." BGC Financial director Roger Volz says the next levels of resistance for WTI occur at $79 and $79.60. The key support level for WTI today is at the intraday low of $76.90. "It should not break support at this time, but if it does, it will be a negative and set the tone for a retest of yesterday's low," says Volz. Volz says the next level of support for Brent comes in at $100, after which a move to $103.10 could result in a technical relief rally. Energy stocks were generally advancing. EOG Resources ( EOG) was gaining 2.2% to $75.26; Suncor Energy ( SU) was surging 7.1% to $25.84; Occidental Petroleum ( OXY) was adding 2.5% to $75.10; ConocoPhillips ( COP) was rising 1.5% to $63.20; Apache ( APA) was increasing 2.7% to $80.91; and Triangle Petroleum ( TPLM) was up 0.3% to $3.74. Upstream oil and gas company, Talisman Energy ( TLM) was falling 3.6% to $11.15. Canaccord Genuity analysts on Wednesday lowered their price target for Talisman by $2 to $21 and maintains their hold rating for the stock. "We reiterate our view that TLM continues to have headline risk -- especially around the North Sea on the heels of last night's operations update, which lowered production expectations." -- Written by Andrea Tse in New York. >To contact the writer of this article, click here: Andrea Tse.