Oil jumps on U.S. jobs rise, Brent hits 10-week high

Fri Aug 3, 2012 4:08pm EDT
 
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By Robert Gibbons

NEW YORK (Reuters) - Oil prices rose sharply on Friday, with Brent crude futures hitting a 10-week high, after a U.S. nonfarm payrolls report showed employers added more jobs than expected in July.

U.S. crude jumped nearly 5 percent as the better-than expected jump in jobs additions, even with a small rise in the unemployment rate, to 8.3 percent, sparked a rally in equities markets and pushed the euro up versus the dollar. .N <USD/>

The 19-commodity Thomson Reuters-Jefferies CRB index .CRB rose 2 percent, led by U.S. crude as a weak dollar fed the bull market sentiment.

The dollar .DXY slipped 1 percent against a basket of currencies. A weaker U.S. currency can be supportive to dollar-denominated oil and other commodities.

"Today's U.S. employment report for July was much better than economists had expected, and equity and industrial commodity markets are likely to respond bullishly today," Jason Schenker, president at Prestige Economics LLC in Austin, Texas, said in an email.

Brent September crude rose $3.04 to settle at $108.94 a barrel, having pushed 3 cents above the 100-day moving average to reach $109.13, highest intraday front-month price since reaching $109.36 on May 22.

U.S. September crude rose $4.27 to settle at $91.40 a barrel, having reached $91.74, highest since July 20.

U.S. crude fell 2 percent on Thursday on weak economic data and dashed hopes for more stimulus when the European Central Bank did not announce immediate and concrete new actions to bolster economic growth.   Continued...

 
An employee holds a gas pump at a gas station of Hyundai Oilbank in Seoul June 15, 2012. REUTERS/Choi Dae-woong