Oil above $84 on better than expected US jobs data
Oil prices climbed above $84 a barrel Monday after better than expected U.S. jobs data and a vow from European leaders to support the region's bank sector hampered by the sovereign debt crisis.
By early afternoon in Europe, benchmark crude for November delivery was up $1.42 at $84.40 a barrel in electronic trading on the New York Mercantile Exchange. The contract climbed 39 cents to settle at $82.98 in New York on Friday.
In London, Brent crude was up $1.02 to $106.90 a barrel on the ICE Futures exchange.
The Labor Department said Friday that the U.S. economy added 103,000 jobs last month, more than economists had forecast. Analysts have been concerned in recent months that a sluggish job market could portend a recession in the second half.
A debt crisis in Europe and its possible impact on global economic growth has undermined investor confidence, sending crude to a 12-month low last week at $75.
But prices have bounced back amid hopes European Union leaders will soon implement a major recapitalization of the region's banks to safeguard them against a possible default by some member states such as Greece.
German Chancellor Angela Merkel said Sunday that she and French President Nicolas Sarkozy "are determined to do the necessary to ensure the recapitalization of Europe's banks."
Merkel spoke after talks with Sarkozy at Berlin's chancellery aimed at forging an agreement ahead of a summit of the European Union's 27 leaders later this month.
Despite the seemingly positive news from the U.S. and Europe, analysts said another factor may have been behind Monday's bullish moves in crude prices.
"We do not regard these two factors as either appropriate or sufficient to justify a sustained price recovery and attribute the upward movement more to a countermovement following the severe losses of recent weeks," said a report from Commerzbank in Frankfurt. "Some financial investors are likely to have regarded the lower price level as an opportunity to build up positions."
In other Nymex trading, heating oil was up 1.39 cents to $2.8727 per gallon and gasoline futures added 3.08 cents to $2.6784 per gallon. Natural gas shed 1.5 cents to $3.466 per 1,000 cubic feet.
Alex Kennedy in Singapore contributed to this report.