BUSINESS

Oil above $96, tracking stock gains, after report shows steady US job growth

06/07/2013 10:40 EDT | Updated 08/07/2013 05:12 EDT
NEW YORK, N.Y. - The price of oil closed above US$96 Friday, after the government said the economy added 175,000 last month, a good sign for fuel demand.

U.S. benchmark oil for July delivery gained $1.27, or 1.3 per cent, to finish at $96.03 a barrel in New York. Oil ended the week with a gain of 4.4 per cent.

The oil market's initial reaction to the report from the U.S. Labor Department was negative. Oil fell as low as $93.72 a barrel earlier Friday. But the stock market gave the jobs numbers a thumbs-up and oil took off from there. At one point oil it reached $96.39.

The job growth in May was at a steady pace that showed strength in the face of tax increases and government spending cuts. But the unemployment rate rose to 7.6 per cent from 7.5 per cent in April. That's because more people began looking for work, a healthy sign, but only about three-quarters found jobs.

Analysts don't expect that the jobs growth is strong enough to convince the Federal Reserve to pull back on the economic stimulus currently in place. Those measures have been intended to ease long-term borrowing costs, and have had the effect of supporting the price of oil.

Meanwhile, Brent crude, a benchmark for many international oil varieties, rose 95 cents to finish at $104.56 a barrel on the ICE Futures exchange in London.

In other energy futures trading on the New York Mercantile Exchange:

— Wholesale gasoline rose two cents to end at $2.87 a gallon.

— Heating oil gained two cents to finish at $2.89 per gallon.

— Natural gas was flat at $3.83 per 1,000 cubic feet.

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Pablo Gorondi in Budapest and Pamela Sampson in Bangkok contributed to this report.

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