NEW YORK: Brent crude rose nearly $ 2 to more than $ 104 a barrel after better-than-expected job growth in the US raised the prospect of stronger demand in the world’s top oil consumer.
US employment rose more than expected in April, pushing the unemployment rate to a four-year low of 7.5 percent, which could help ease concerns about a sharp slowdown in the economy.
Brent crude was up $ 1.77 at $104.62 a barrel by 1555 GMT, while US crude was up $ 1.96 at $ 95.95. Both benchmarks gained more than $ 2 in earlier trading.
US equity markets climbed to intraday record highs, providing support to oil prices.
“Clearly, (the jobs report) is lending strength to the outlook for the US economy and for energy demand, which is quite sensitive to the employment outlook,” said John Kilduff, a
partner at Again Capital in New York.
The US employment report outweighed bearish data showing weak manufacturing activity in the US and China. The US Commerce Department said orders for manufactured
goods dropped 4 percent in March.
“Weaker-than-expected factory orders and the European Commission’s downward revision to euro zone economic prospects were overshadowed by the employment data and overpowered by the trade flow,” energy specialist Tim Evans of Citi Futures Perspectives wrote in a research note.
Some analysts said any rise in oil prices may be shortlived since oil stocks have been increasing. US crude stocks surged to record levels last week, according to government data released recently.
“There’s unlikely to be a sustained rally, especially when the focus returns to the high level of oil stocks,” said Olivier Jakob of Petromatrix in Zug, Switzerland.
Weak manufacturing news from China, the world’s No. 2 oil consumer, is still clouding the outlook for demand.
“I think the PMIs (purchasing manager indexes) which we’ve seen this week still remind us that in China we need to see further evidence of stabilization. And in the United States we want to see signs that are a little less stop-start,” said Ben Taylor of Sydney-based CMC Markets.
Oil prices posted sharp gains for a second day. They rose on Thursday after the European Central Bank cut interest rates to record lows, spurring investor appetite for riskier assets.
Brent rises above $104 as job data fuels hope
