You are here
Oil rises as strong US jobs report stokes growth hopes
[NEW YORK] Oil prices rose modestly Friday as an unexpectedly strong US jobs report encouraged optimism about better economic growth and demand in the world's largest consumer of crude oil.
Prices had plunged nearly five per cent Thursday, leaving the market ripe for bargain pickers.
The US June employment report, showing 287,000 jobs added in June following a dismal May, eased some concerns about the economy.
US benchmark West Texas Intermediate for August delivery, rose 27 US cents to US$45.41 a barrel on the New York Mercantile Exchange.
Brent North Sea oil for September delivery, the global benchmark, closed at US$46.76 a barrel in London, a gain of 36 US cents from Thursday's settlement.
"The job number is the main feature for today" in the US market, said Phil Flynn of Price Futures Group.
The jobs data suggests, he said, that "the strong demand we've seen in the US will probably continue because the economy is not as bad as we feared."
Friday's fresh buying was supported by investors finally focusing on a steep fall in US production reported Thursday, which the market at first "completely ignored", according to Commerzbank analysts.
US crude output fell by 194,000 barrels a day last week to 8.43 million barrels a day, down 12 per cent from a year ago.
While that was bullish for the long-oversupplied market, Mr Flynn pointed out that the number of active drilling rigs in the United States, a barometer of future production activity, rose by 10 this week to 351, the fifth gain in six weeks.
"That's why the market is bouncing back and forth, because it's having a hard time finding direction whether this is bullish or bearish for prices," he said.