LONDON (AFP) – Oil prices firmed on Friday as traders examined a better-than-expected payrolls report in the United States, the world’s leading energy consumer. Brent North Sea crude for delivery in October gained just 31 cents to 77.24 dollars a barrel in afternoon London trade.
New York’s main contract, light sweet crude for October, added a marginal five cents to 75.07 dollars.
In an eagerly-awaited unemployment report, the US government’s Labor Department said on Friday that the US economy lost 54,000 jobs in August, far better than market expectations for a larger loss of 120,000 jobs for last month.
The figures, which are seen as a crucial litmus test for the sputtering American economic recovery, spurred European and US stock markets higher.
Tamas Varga, analyst at PVM Oil Associates in London, said the report was «certainly positive» in the short-term for oil prices.
«Coupled with this week good manufacturing (data) from all over the world, it is bullish,» added Varga.
«How long this sentiment is going to last is a different question.
«Generally, unemployment is still high on both sides of the Atlantic and the oil market seems to be well-supplied.»
The US unemployment rate meanwhile edged up to 9.6 percent in August, from 9.5 percent in July, showing the recovering economy was still struggling to create jobs.
Oil prices had risen on Thursday after a fresh batch of better-than-expected US figures on housing, benefits and factory orders that suggested the outlook was not as bad as had been feared.
The market was also supported by hurricane concerns in the Gulf of Mexico, where many energy installations are based, and by news of an explosion on an oil rig in the region.
On Wednesday, oil also jumped in the wake of strong manufacturing data from the United States and China — the world’s two biggest consumers of oil.
Analyst Rebecca Seabury, at British-based energy consultancy Inenco, said the market was reacting to the recent positive economic data but was also held back by high US crude inventories.
«The market has been responding to positive signs of economic activity in the Asian and US markets,» she told AFP.
«However as a result of the global recession, US stock levels of oil are close to record levels, which is placing a downward pressure on prices.
«Until we see some reduction in US stocks, this will limit the market’s response to indications of economic recovery.»
The oil market had fallen sharply on Monday and Tuesday as traders fretted over the pace of the US economic recovery and growing fuel inventories.