Oil prices are choppy as the quarter ends

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gnrTwenty-seven years to the day after Guns N’ Roses released the single ‘Patience’ (anyone feel old? Nope? Me neither…), and the crude market is trying to bide its time ahead of Nonfarm Friday tomorrow, but is getting buffeted around by a choppy US dollar. Here are seven things to consider today:

1) Taking a look at the economic data, Europe had a swathe of releases out earlier; German retail sales were negative for a second consecutive month, down 0.4% MoM, while unemployment remained at a record low of 6.2%.

British data exuded all the joys of spring, as GDP was better than expected, up 0.6% for the quarter (in Q4), while money supply showed strength last month, as did mortgage approvals.

2) Preliminary inflation data from the Eurozone was a mixed bag, with Germany, France and Italy better than expected, Spain worse. On the aggregate, Eurozone core inflation is up to 1.0% YoY. As we know all too well, all paths lead back to energy, hence headline inflation remains in deflationary terrain at -0/1% YoY…due to lower energy costs.

3) Today’s preliminary print for Eurozone inflation has lifted the euro to a seven-week high. This is helping to ease the dollar index lower, lending a modicum of support to crude prices, although the Bank of Japan Governor Haruhiko Kuroda has tried to weaken the yen overnight, saying there is no limit to its current quantitative easing plan.

The chart below highlights how the weaker dollar  – in response to a stronger euro and yen – has bolstered crude prices in the last two months:

us dollar vs crude

4) Onto the US, and jobless claims have let us down a little bit ahead of tomorrow’s official monthly employment report. Weekly claims have come in at 276,000, higher than the consensus of 265,000. Yesterday’s ADP report showed 200,000 jobs created last month, and 205,000 are expected from nonfarm payrolls tomorrow.

5) After last week’s natural gas storage report yielded the first injection of the year, colder weather means we are set to return to a withdrawal today, with consensus for a