Benchmark crude oil futures will likely extend last week's near 2 percent decline reflecting a patchy global recovery, growing fuel inventories and slack demand, CNBC's weekly oil sentiment survey showed.
U.S. economic releases – particularly 'Tier One' data like the official jobs report – are taking on heightened prominence as global investors try to decipher when the Federal Reserve will start winding down its bond-purchasing program. Economists expect that rose 165 thousand in May, matching April's number, and that the unemployment rate stayed flat at 7.5 percent.
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"On Brent, we are bearish," said Dhiren Sarin, Chief Technical Strategist for Asia-Pac at Barclays Capital. "The payroll number will be important for risk sentiment though the current setup in Brent argues for selling rallies within range -- the range being $100 to $105 broadly speaking. It would take a close above $105 to rethink this outlook and allow for further bullish price movement."
Given the market's preoccupation with Fed 'tapering', a sub-par jobs number may be a positive factor for risk assets because it may mean the U.S. central bank will push out the time-frame for rolling back the stimulus. Conversely, upbeat data may be interpreted negatively by markets as it raises fears stimulus will be withdrawn earlier than anticipated.