Oil rose in New York, capping the biggest weekly gain in seven months, as larger-than-expected U.S. jobs growth eased concerns that the economy slows. Futures rose as the Labor Department said payrolls grew by 103,000 workers in September and 57,000 in August. The median forecast called for a gain of 60,000 in September. Oil climbed 4.8 percent this week, the most since March, when U.S. stocks fell and European central banks announced stimulus plans.
“There are some really great cause we are heading into another recession and that will suppress the following to ensure that poor grades come out,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, who oversees $ 1.3 billion. “We were a very good week and the figures were better than expected.”
Crude oil for November delivery rose 39 cents to $ 82.98 per barrel down to the New York Mercantile Exchange. Prices are down 9.2 percent this year.
Brent crude oil for November settlement rose 15 cents to end the session at $ 105.88 per barrel on the London-based ICE Futures Europe exchange. The European benchmark, rose 3 percent this week, the most since the week ending July 8.
Employment will include the return to work of 45,000 striking telecom workers. The unemployment rate held at 9.1 percent. Hours and earnings both increased, the report found, and revisions to earlier reports, added a total of 99,000 jobs to payrolls in July and August.
“Greatest Driver”
“The biggest driver of oil markets, economic growth,” said Jason Schenker, chairman of the Prestige Economics, an energy consulting firm in Austin, Texas. “People were always nagging that we enter another recession, and here is a piece of economic news that points to growth.”
Industrial production in Germany, Europe’s largest economy, fell less than expected in August. Production fell 1 percent from July when it rose 3.9 percent, the Ministry of Economic Affairs in Berlin said today. A 2 percent decline was expected, based on the median of 35 estimates in a Bloomberg News survey. Output by 7.7 percent this year, adjusted for working days.
“The oil market will continue to move to the latest economic news,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “We are looking for signs of whether the economy will spiral back into a recession and begin to improve.”
The European Central Bank said yesterday it will bring back many years of lending, allowing banks access to unlimited cash to January 2013. The ECB will also purchase covered bonds in order to stimulate lending. The Bank of England yesterday announced its biggest boost since the recession.
Meeting in Berlin
German Chancellor Angela Merkel and French President Nicolas Sarkozy met in Berlin on October 9 to Greece to discuss debt problems as the nation edges closer to the standard.
Oil fell as much as 1.5 percent after Fitch Ratings lowered the ratings of Spain and Italy, reinforcing concern the European debt crisis will increase. Spain had its foreign and local currency issuer default ratings on long-term reduced to AA-from AA +, while Italy had the same set of rating lowered to A + from AA-, the company said in statements today.
“The Fitch downgrade of Spain and Italy are a reminder of the looming European debt crisis and the uncertain markets,” said John Kilduff, a partner at New Capital LLC, a New York-based hedge fund that focuses on energy. “The job numbers are not as strong as initially thought.”
U. S. Stocks
U.S. crude oil inventories fell 4.68 million barrels to 336.3 million last week, its lowest level since January, according to an Energy Department report on Oct. 5. Gasoline supplies fell 1.14 million barrels to 213.7 million last week, the report found.
“The big draw this week gave the market provides a boost,” Schenker said. “At the end of the day this is about supply and demand.”
Oil volume in electronic trading on the Nymex was 654,535 contracts from 3:22 p.m. in New York. Volume totaled 836,382 contracts yesterday, the highest since Aug. 31 and 25 percent higher than the average for the last three months. Open interest was 1.44 million contracts.
source:bloomberg
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