Oil in Global Economy Series: What NFP tells about US oil market?

Last Friday’s non-farm payroll report, released by the US Bureau of Labor Statistics gave out a piece of crucial clue that an increase in the oil price from $27 per barrel in February last year to $51 per barrel as of today has led to the recovery in the sector.

We, at FxWirePro, have already discussed that the production from the United States has increased by more than 300, 000 barrels per day from their bottom in July and reached 8.77 million barrels per day last week. NFP gave out compelling evidence that shows the industry is recovering once again. Payroll in the oil and gas sector rose for the very first time in two years in last November. Employment in Oil and gas extraction and support services rose by 3,300 after losing more than 150,000 jobs over the past two years.

The recovery in the shale oil production in the United States has the ability to undermine the production cut agreement reached by both OPEC and N-OPEC countries which might see the supply shrink by 1.758 million barrels per day from these producers in the first half of the year.