Forexpros – Crude oil futures edged higher on Friday, climbing to a three-month high after official data showed that the U.S. unemployment rate unexpectedly fell to a six-month low in October, boosting expectations for future oil-demand in the U.S.
On the New York Mercantile Exchange, light sweet crude futures for delivery in December traded at USD94.42 a barrel by close of trade on Friday, adding 0.95% over the week, the fifth consecutive weekly gain.
Crude prices rose to USD94.92 a barrel on Friday, the highest price since August 2, after the U.S. Department of Labor said in a report that the unemployment rate declined unexpectedly to a six-month low of 9.0% in October, down from 9.1% the previous month.
The data showed that nonfarm payrolls rose by 80,000 in October, falling short of expectations for a gain of 95,000, while the previous month’s figure was revised up to an increase of 158,000 from 103,000.
Oil traders have been paying close attention to readings on U.S. employment levels for signs that people are returning to work, thus driving more and using more energy. The U.S. is the world’s biggest oil consumer, accounting for 19.1 million barrels a day, or 22% of global consumption.
However, gains were limited as investors remained jittery ahead of a highly-anticipated government confidence vote in Greece, amid growing internal opposition to Prime Minister George Papandreou’s handling of the country’s sovereign debt crisis.
Early Saturday morning, Papandreou’s government survived the vote after calling for a new government coalition to lead the debt-laden country.
Meanwhile, leaders of the Group of 20 industrialized nations meeting in Cannes on Friday failed to agree on a plan to enhance the euro zone’s response to its sovereign debt crisis.
German Chancellor Angela Merkel said that few G-20 countries showed interest in providing additional resources to the European Financial Stability Facility, while Italian Prime Minister Silvio Berlusconi agreed to allow the International Monetary Fund to monitor the country’s progress on cutting its deficit and implement economic reforms after Italian bond yields rose above 6.3% to a euro-era high.
Crude prices jumped nearly 1.5% on Thursday after the European Central Bank unexpectedly cut its benchmark interest rate to 1.25% from 1.50% and amid reports that Greece abandoned plans to hold a referendum on its recent bailout deal.
Crude prices also found support after Federal Reserve Chairman Ben Bernanke said Wednesday that an additional round of asset purchases, specifically mortgage-backed securities, was a “viable option” after the bank lowered its growth forecast for next year.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for December delivery settled at USD112.31 a barrel by close of trade on Friday. The Brent contract rose 2.1% over the week, with the spread between the Brent and the crude contracts widening to USD17.89 a barrel.
In the week ahead, developments in Greece will remain in focus, as opposition parties are calling for early elections while George Papandreou is pushing for a cross-party government to implement the latest European aid package.
Oil traders will also eye a flurry of data from China to gauge the economic strength of the world’s second largest oil consumer.
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