Oil Rises After US Unemployment Drops to Six Year Low

West Texas Intermediate and Brent crudes advanced after U.S. employment gains exceeded 200,000 for a ninth month and the jobless rate fell to a six-year low, bolstering the outlook for fuel demand.

Futures rose as much as 1.6 percent in New York and 1.2 percent in London. Payrolls increased by 214,000 in October following a 256,000 gain the prior month that was more than initially estimated, Labor Department figures showed today. The unemployment rate declined to 5.8 percent. Both oils are heading for weekly declines after OPEC predicted it will need to supply less crude amid the U.S. shale boom.

“The market is concentrating on the jobs numbers,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said by phone. “The unemployment rate dropped to 5.8 percent even as the labor force expanded, which implies that more people will be consuming goods and driving. This is all good for demand.”

WTI for December delivery rose $1.05, or 1.4 percent, to $78.96 a barrel at 9:40 a.m. on the New York Mercantile Exchange. Prices are down 2 percent this week and 20 percent this year. The volume of all futures traded was 6 percent below the 100-day average for the time of day.

Brent for December settlement gained 85 cents, or 1 percent, to $83.71 a barrel on the London-based ICE Futures Europe exchange. Volume was 7.1 percent lower than the 100-day average. Prices have fallen 24 percent in 2014. The European benchmark crude traded at a $4.70 premium to WTI, compared with $4.95 at yesterday’s close.

via Bloomberg

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