Oil rises above $93 after US jobs data
The price of oil jumped to above $93 a barrel Friday, recouping some recent losses as the U.S. economy added fewer jobs than expected, fueling speculation that the Federal Reserve will reconsider its plans to slow economic stimulus.
By mid-afternoon in Europe, benchmark U.S. oil for February delivery was up $1.41 to $93.07 a barrel in electronic trading on the New York Mercantile Exchange. On Thursday, the contract fell 67 cents to $91.66, its lowest close in eight months.
The world’s largest economy added just 74,000 thousand jobs in December, the Labor Department said, while analysts had forecast the addition of 196,000 jobs. The unemployment rate fell from 7.0 percent to 6.7 percent, but it was mostly because of a drop in the number of people seeking work.
The Fed said in December it would start cutting back its bond purchasing program meant to spur economic growth by $10 billion a month. Outgoing Fed Chairman Ben Bernanke said that further cuts would depend on how many new jobs were added in coming months.
The stimulus program, which has also kept interest rates low, has helped raise oil prices by weakening the dollar and also by attracting investors to commodities in search of higher profits.
A weaker dollar usually boosts oil prices by making crude cheaper for traders using other currencies. On Friday, the euro was up at $1.3646 from $1.3604 late Thursday in New York.
Oil prices have been mostly falling since Dec. 27, when they topped $100 for the first time in since October.
Although the unusually cold winter in the U.S. is expected to fuel demand for refined oil products, global supplies of crude oil are ample despite some persisting concerns about political instability in the Middle East.
Brent crude, used to set prices for international varieties of crude, gained 81 cents to $106.77 on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
— Wholesale gasoline added 1.18 cents to $2.6544 a gallon.
— Natural gas rose 0.7 cent to $4.012 per 1,000 cubic feet.
— Heating oil gained 0.32 cent to $2.9246 a gallon.