Friday, Aug 03, 2012
--Crude-oil futures jumps after Labor Department data shows better-than-expected job gains in July
--Nymex September crude up 3.1% at $89.87 a barrel
--Futures prices have wavered this week
By Nicole Friedman and Dan Strumpf
NEW YORK--Crude-oil futures jumped above $90 a barrel after a closely watched report showed the U.S. added more jobs than expected last month.
Light, sweet crude for September delivery recently rose $2.74, or 3.1%, to $89.87 a barrel on the New York Mercantile Exchange. The contract shot as high $90.09 in the wake of the 8:30 a.m. EDT data, its highest level since Wednesday. Brent crude on ICE Futures Europe recently rose $1.98, or 1.9%, to $107.88 a barrel.
The U.S. economy added 163,000 jobs in July, the Labor Department reported, outpacing the expected gain of 95,000. But unemployment rose one-tenth of a percent to 8.3%.
More jobs added means improved oil demand could be on the horizon. A weak jobs market in the U.S., the world's biggest oil consumer, has weighed on crude prices for much of this year, keeping motorists off the road and eroding demand for goods produced from oil.
"The number was sort of a mixed bag," said John Kilduff, founding partner at Again Capital. While new jobs indicate increased economic activity, which could boost demand for oil, the better-than-expected number could also give the Federal Reserve more leeway to hold off on additional stimulus measures, he said.
"The number was middling enough that it's hard to conclude that the Fed will come in with more easing sooner rather than later," Mr. Kilduff said, disappointing oil investors who are hoping for central bank action to shore up the U.S. economy.
Futures prices have wavered this week. A higher-than-expected decline in inventories supported prices, but investor optimism was damped by the failure of both the Fed and the European Central Bank to announce the new stimulus measures that some traders had hoped were on their way.
Friday morning's rally will be capped by the approaching end of driving season, which will reduce demand for oil, said Stephen Schork of the Schork Report. "At the end of the day the overall economic picture is muddled, to say the least," he said.
Front-month September reformulated gasoline blendstock, or RBOB, recently rose $3.92, 1.4%, to $2.9088 a gallon. September heating oil rose 5.32 cents, or 1.9%, to $2.8955 a gallon.
Write to Dan Strumpf at firstname.lastname@example.org and Nicole Friedman at email@example.com
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(END) Dow Jones Newswires
August 03, 2012 10:08 ET (14:08 GMT)