Jobs Data Damage to Crude Could Have Been Worse

An unemployed worker checks out a brochure at a jobs fair.
Andrew Harrer | Bloomberg | Getty Images
An unemployed worker checks out a brochure at a jobs fair.

The weak March jobs number was bad news for crude, but it certainly could have been worse for traders who were long black gold.

Only 88,000 jobs were createdwell under expectations of 200,000 new jobs. And while crude futures still dropped on the morning, they recovered nicely from their low of $91.91.

(Read More: Unemployment Rate Falls, but Don't Pop the Corks Yet)

So if the jobs report truly delivered terrible news about the economy, why did traders jump back into oil?

"It's a bad jobs number," said GRZ Energy President Anthony Grisanti. "But still, 88,000 people were hired. It's not like economic activity is stopping. There's still growth."

In addition, Grisanti points to the action in the dollar, which dropped off the number. "A weak dollar means higher commodities, and that's why crude is holding up."

Addison Armstrong, senior director of market research at Tradition Energy, similarly credits the dollar index with crude's partial recovery.

"Much of the news out there is bearish, and it certainly felt justified earlier this morning when crude was down as much as it was," Armstrong said. "But given that the dollar turned around on the non-farm payrolls number, that took some of the downward pressure out of oil."

And there's another factor. Crude has had a terrible week, and it can really only fall so far. After crude hit its morning low, Armstrong said, "you probably saw some short-covering."

Meanwhile, Grisanti is hoping crude does fall back below $92, but not because he's bearish. "If it gets back down to that $91.90, I would definitely be a buyer," the trader said.

— By CNBC's Alex Rosenberg

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