Oil prices rise after drop in US hiring expands
NEW YORK (AP) — A surge in U.S. hiring lifted oil prices for the first time in a week. As more Americans commute to work and the economy picks up, demand for energy is expected to rise.
U.S. benchmark crude increased by $1.48 on Friday to end the week at $97.84 per barrel. It was the first time since Jan. 26 that the price of crude ended the day higher. Brent, used to price international varieties of crude, rose by $2.51 to finish at $114.58 per barrel.
Prices rose after the government reported that the U.S. economy added 243,000 jobs in January. That was the biggest increase since April of last year, when 251,000 jobs were created. The unemployment rate fell to 8.3 percent — the lowest in three years.
The positive U.S. jobs data added to evidence that the world's largest economy — and biggest user of gasoline — is growing stronger. Manufacturing grew in January at the fastest pace in seven months. Factory orders rose in December by 1.1 percent, driven higher by big increases in spending on industrial machinery and autos.
The U.S. economic reports suggest the, "economy is in recovery with fewer jobless claims, more people on payrolls, higher equities prices, brisk car sales, and high travel bookings," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.
Oil prices had fallen 3 percent during the first four days of the week. They were pushed lower on reports that U.S. fuel demand continues to fall behind where it was last year. The 4-week average for gasoline demand is down 7.3 percent. Last year, American drivers used nearly 3 percent less gasoline than they did in 2010.
Friday's employment report led investors to believe that gasoline demand could eventually rebound. Gasoline futures, which gauge where traders think prices are headed, rose by 4.55 cents to end at $2.9144 per gallon.
At the pump, regular unleaded gasoline is already at the highest ever for this time of year, reflecting surging energy demand in other parts of the world like China. A gallon of gas cost an average of $3.467 — 17.9 cents more than a month ago and 35.1 cents more than a year ago, according to auto club AAA, Wright Express and Oil Price Information Service.
Prices are expected to rise in coming months as the economy improves and as refineries crank up production of more expensive warm-weather gasoline blends. Analysts say prices could reach $4 per gallon by the spring.
In other energy trading, heating oil added 6.15 cents to end at $3.1144 per gallon and natural gas fell by 5.5 cents to finish the week at $2.499 per 1,000 cubic feet.