Oil price rebound on upbeat US payrolls data
World oil prices rebounded on Friday as traders were heartened by better-than-expected non-farm payrolls data in the United States, but the market remains on course to end the week with sharp losses.
In late afternoon London deals, Brent North Sea crude for delivery in June rallied $2.05 to $112.85 per barrel, having earlier slumped to $105.15 -- the lowest level since February 21.
New York's main contract, light sweet crude for June, leapt 95 cents to $100.75, after earlier diving to a similar multi-month low at $94.63.
The US private sector forged ahead in creating jobs in April, a sign the recovery is gaining traction despite a rise in the unemployment rate to 9.0 percent, official data showed Friday.
Businesses added a solid 268,000 jobs in April, encouraging belief that the economy's recovery was on track even as federal and local governments cut spending and payrolls.
Overall the economy created a net 244,000 nonfarm jobs last month, far more than the 185,000 expected, with the biggest growth in the service sector.
It was the strongest jobs creation since May 2009, a month before the country's worst recession in decades ended.
And the department sharply revised higher job creation figures for February and March, putting net job gains above the key 200,000 threshold for three consecutive months.
The surprisingly upbeat data boosted oil prices because the United States is the biggest crude consuming nation in the world.
"Prices continued to make new multi week lows today; however they have since pulled back from these lows on a positive US payrolls number and have recovered into positive territory," said CMC Markets analyst Michael Hewson.
Despite Friday's bounce, oil prices have plunged sharply this week, mirroring a fierce sell-off across most commodities, with sentiment hit by other weaker US data, a stronger dollar and concerns over weak energy demand.
Oil had already plunged on Thursday, with New York crude diving at its fastest pace for two years in the wake of disappointing US jobs figures.
It had lost more than eight percent in value as it dropped below $100 a barrel for the first time since March 16.
"Commodities in general suffered a significant setback yesterday, as concerns over economic growth in the United States again weighed on prices," said analyst David Hart at Westhouse Securities.
"Oil prices were particularly weak, with additional declines this morning. A stronger US dollar on the day also contributed to the weakness."
New US jobless claims rose to 474,000 in the week ending April 30, a 10 percent increase from the prior week and an eight-month high, the Labor Department reported on Thursday.
Crude futures have also fallen heavily in response to downbeat Chinese economic data, and fears over the eurozone debt crisis after the bailout of debt-wracked Portugal.
Many commodities also fell this week as the euro tumbled against the dollar after the European Central Bank cast doubt on the likelihood of a eurozone interest rate rise soon.
A stronger US unit makes dollar-priced commodities more expensive for buyers using weaker currencies. That tends to dampen demand and prices.
© 2011 AFP