Brent Rises on Weak Dollar, US Economic Stimulus

Getty Images

Brent crude oil rose $1 a barrel on Friday in choppy trade as data pointing to modest gains in U.S. hiring gave U.S. stock markets a boost, taking crude along for the ride.

The United States added 175,000 jobs last month, Labor Department data showed, just above the median forecast in a Reuters poll.

Investors read the figure as low enough to soothe concerns that the U.S. Federal Reserve might end its stimulus efforts sooner than expected. All three major U.S. stock indexes traded up around 1 percent by mid-afternoon EDT.

The unemployment rate ticked a tenth of a percentage point higher to 7.6 percent, with the increase seen as encouraging since it was driven by more workers entering the labor force.

Brent crude was last up about $1 to trade near $105 a barrel, while U.S. light, sweet crude last rose $1.30 to trade above $96 per barrel. Brent was on track to post its strongest weekly gains since July 220, 2012, rising 4 percent, while US oil was heading for the strongest weekly gain since April 26 at 4 percent.

"U.S. oil gained $1.10 to $95.85 a barrel, heading for the strongest weekly gain since April 26 at nearly 4.5 percent.

Brent and U.S. crude dipped just after the release of the jobs data but began to rise when U.S. stock markets opened.

"Oil is taking a cue from the equity market, which obviously liked the employment data," said John Kilduff, a partner at Again Capital LLC in New York.

"The upside surprise versus expectation is signaling further economic improvement and energy demand."

The Fed's policy-setting committee meets on June 18-19. With data ranging from manufacturing to consumer spending showing the economy hit a soft patch early in the second quarter, it is unlikely the U.S. central bank will announce at that meeting a lessening of the $85 billion in bonds it is buying each month.

Tropical Storm Andrea was moving close to Fayetteville, North Carolina on Friday afternoon, which traders said supported U.S. crude.

"No one wants to be short on the weekend with a potential storm coming," said Bill Baruch, senior market strategist at in Chicago, Illinois.

Brent had been supported on Thursday by news that the Buzzard oilfield in the UK North Sea had suffered a production outage, the second in less than a week. The field's normal production is about 200,000 barrels per day.

News of a fall in U.S. oil inventories also supported prices, particularly the U.S. benchmark. Crude stocks at the Cushing, Oklahoma oil hub declined more than 1 million barrels between May 31 and June 4, energy industry intelligence service Genscape reported Thursday.