Friday, August 12, 2011

Oil rises on encouraging US jobs report

Oil prices rose Thursday after positive news about the jobs market calmed some concerns about future demand.

Oil climbed along with the major U.S. stock indexes. Benchmark West Texas Intermediate oil gained 25 cents to $83.14 per barrel in Thursday midday trading on the New York Mercantile Exchange. In London, Brent crude was down 11 cents at $106.57 per barrel on the ICE Futures exchange. It dropped as low as $104.43 per barrel earlier.

"My feeling is right now that the price of oil is going to be dependent on what happens to the stock market overall," PFGBest analyst Phil Flynn said. "There's a lot of fear out there right now and the market is being dictated by fear."

Oil, like the stock market, has been volatile. Benchmark crude has ranged from $78 to $85 a barrel this week.

The Labor Department said Thursday that the number of people who applied for unemployment benefits fell last week below 400,000 for the first time in four months, a sign that the job market may be improving.

That positive economic news helped stocks rebound from Wednesday's big sell-off. The Dow Jones industrial average and the S&P 500 were up more than 2 percent. The Nasdaq rose about 3 percent.

Investors remain uneasy about Europe, monitoring efforts by the European Central Bank to relieve debt problems in Spain and Italy. The leaders of France and Germany, the region's biggest economies, will meet next week to talk about the region's financial problems.

Closer to home, gasoline prices continued to fall, dropping 1.7 cents on Thursday to a national average of $3.62 a gallon, according to AAA, Wright Express and the Oil Price Information Service. That's about 8 cents less than a week ago but still 84 cents more than a year ago.

The Energy Department said Thursday that the nation's natural gas supplies rose again last week. The U.S. is awash in natural gas and prices should stay low as supplies continue to build. Natural gas futures rose 11 cents to $4.115 per 1,000 cubic feet.

In other Nymex trading, heating oil rose 1 cent to $2.8750 a gallon, and gasoline gained 2 cents at $2.8022 a gallon.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2011-08-11-Oil-Prices/id-17da3c9fcd0244b9942f7f1e44e3d93a

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