(CEP News) - Oil prices are trading at one-month highs despite another drop in equity markets and another soft U.S. employment report.

Commodity markets appeared to be unfazed despite a historic drop in February nonfarm payrolls report and negative sentiment in markets. The U.S. economy shed 651,000 jobs in February, the fourth month in a row that job losses have been more than half-a-million. The unemployment rate rose five-tenths to 8.1%, the highest rate since December 1983, against expectations for a 7.9% rate.

Stephen Schork, from the Schork report said he was not surprised that commodity markets didn’t react to the data. He pointed out that it no secret that the data around the global is bad and markets appear to have that priced in.

As there where prices could go, Schork said it’s is really hard to tell. He said oil prices are stuck in a channel. If prices break through the mini-resistance at $45 a barrel then it could lead to a test of $50 but if resistance hold then oil falls back down to the bottom of the range at $35.

“I am neutral to bearish on oil right now,” he said. “But it doesn’t matter that there is absolutely no global industrial demand. Prices are going up and you don’t have to understand it but you do have to respect it. I’m not a buyer right now but because of the trend I am also not a seller,”

Colin Cieszynski, market analyst from CMC Markets Canada, said a rally across the commodity market could mean that positive global sentiment could finally be starting to turn.

“Normally equities would lead the positive sentiment but this time maybe they are not,” he said. “Equities could be focused on the threat of bankruptcies and commodity markets are focus on global growth sentiment.”

Cieszynski said there is still a lot of negative sentiment lingering in commodity markets, which could make it difficult for oil to make further gains.

“There is a risk that there could be another leg down and I think that will keep prices from shooting higher,” he said. NC

WTI Crude oil is up $2.19 to $45.80 while ICE crude oil is trading up $1.18 to $44.82.

Meanwhile, ICE RBOB gasoline futures are up $1.92 to $133.19 and Globex natural gas is up $0.01 to $1.26. Heating oil at the ICE is up $7.12 to $123.10.

In the mining sector, spot gold is trading up $6.48 to $938.88 USD. In Canadian dollars, gold is up $3.72 to C$1207.31. Silver contracts at the CBOT are up $0.22 to $13.34.

Bloomberg’s index for base metals is up 1.15 points to 115.20. Wheat futures at the CBOT are up $12.00 to $527.00.

All data taken at 3:59 p.m. EST

By Neils Christensen, neilsc@economicnews.ca

CEP Newswires - CEP News © 2009. All Rights Reserved. www.economicnews.ca

The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News.

A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.

Posted in Categories: Canada, Commodities, Economy, Eurozone, Releases, USA.

Subscribe by RSS Subscribe by Email