The S&P 500 and Nasdaq Compositeerased early losses to finish higher Friday to conclude their best week so farthis year, led by continued strength in quarterly earnings reports and a betterthan expected January jobs report. U.S. payrolls came in at a three-month highas employers added more jobs than forecast last month despite a surge inCOVID-19 infections. Average hourly earnings also rose more than expected,although not enough to keep pace with inflation. U.S. Treasury prices fell withthe 10-year yield briefly topping 1.93%, jumping from about 1.5% at the startof the year as the Federal Reserve has signaled a more aggressive fight againstinflation. For the week, the Dow Jones average added 1.1%, the S&P gained1.5%, and the Nasdaq jumped 2.4%.

Oil prices reached seven-year highs onFriday as geopolitical tensions and a winter storm in the United States fueledconcerns over supply disruptions.

Brent crude advanced 2.37% to end theday at $93 per barrel. U.S. West Texas Intermediate crude settled 2.26% higherat $92 per barrel. Both benchmarks were on course for a seventh consecutiveweekly gain.

A winter storm in Texas is behind thelatest oil price rally, fueling concerns about production outages in thePermian Basin, the largest U.S. shale production play. Tight oil suppliespushed the six-month market structure for WTI into steep backwardation(现货溢价) of $8.60a barrel on Friday, the widest since November 2021. Backwardation exists whencontracts for near-term delivery are priced higher than those for later months,encouraging traders to release oil from storage to sell it promptly.

Oil markets have also gained supportfrom tensions surrounding the Ukraine crisis, which have heightened concernsover oil supplies that are already tight.

The late-session recovery in oil priceswas also aided by fresh evidence of OPEC’s struggle to raise output, TheOrganization of the Petroleum Exporting Countries (OPEC) and allies led byRussia, together known as OPEC+, agreed this week to stick to moderate outputincreases of 400,000 barrels per day (bpd), with the group already strugglingto meet existing targets and despite pressure from top consumers to raiseproduction more quickly.

Iraq, OPEC’s second-largest oilproducer, pumped well below its OPEC+ quota in January, data from state-ownedmarketer showed on Thursday.

OPEC+ member Kazakhstan, meanwhile,wants more of its oil output to stay at home to tackle rising fuel prices.

Commerzbank has raised its oil priceforecast for the first quarter of 2022 to $90 a barrel, up from $80 previously.Over the medium term, however, Citi Research expects the oil market to flipinto surplus as soon as the next quarter, helping to put the brakes on therecent surge in prices.

A number of analysts have alreadyforecast $100 oil, with WTI up nearly 20% YTD, building on 2021's more than 50%gain. Geopolitical tensions have meanwhile sent jitters through the market,especially the recent standoff playing out between Russia and Ukraine. Thetrends are also highly inflationary, posing trouble for central bankpolicymakers around the globe. Estimates of Fed rate hikes on Wall Street nowrange from three increases all the way to seven for 2022.