- POSTED: 11 Jan 2014 05:26
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Global oil prices rebounded on Friday from the prior day's losses, finding support from robust demand data in China and dollar weakness after a disappointing US jobs report.
NEW YORK: Global oil prices rebounded on Friday from the prior day's losses, finding support from robust demand data in China and dollar weakness after a disappointing US jobs report.
The main US futures contract, West Texas Intermediate for February delivery, finished the day at US$92.72 a barrel, a gain of US$1.06 from Thursday's closing level.
The European benchmark, Brent North Sea crude for February, rose 86 cents to settle at US$107.25 a barrel in London trade.
The WTI price had fallen Thursday to its lowest level since May 1, weighed down by high US crude and product stockpiles that suggested supplies continue to outpace demand.
But on Friday, WTI pushed higher, solidly wiping out the prior day's 67-cent loss.
The dollar traded lower after the US Labor Department reported a meagre 74,000 jobs were added in the United States in December, far below the 197,000 consensus forecast.
Even the drop in the unemployment rate to 6.7 per cent, from 7.0 per cent in November, mainly reflected the fact that more people had given up looking for work.
The shockingly low job growth in the leading crude oil-consuming nation raised questions about the strength of the economy's recovery.
The dollar was down 0.5 per cent against the euro and 0.7 per cent against the yen in afternoon trade.
"A weaker dollar, so stronger WTI," said Carl Larry of Oil Outlooks and Opinion. A decline in the greenback makes dollar-priced crude oil more affordable, tending to boost demand.
Some analysts predicted that the poor jobs report would encourage the US Federal Reserve to move more slowly in winding down its stimulus program. The Fed began cutting asset purchases this month by US$10 billion to a monthly pace of US$75 billion.
A cold snap sweeping across North America has meanwhile boosted demand for heating fuel, and helped push oil prices higher.
"The surge in demand for heating fuels will inevitably raise the demand for crude oil, which is used as a feedstock for heating fuels. As such, crude oil prices are likely to be well-supported," Phillip Futures said in a market commentary.
Oil prices were "finding support from robust Chinese import data," Commerzbank analysts said in a research note, citing record Chinese crude oil imports in December.
According to the country's customs authorities, Commerzbank said, China imported a record 6.31 million barrels of crude oil per day in December, 10 per cent more than in the previous month.