Singapore: Brent crude held above $112 on Friday on supply concerns as reports of a growing possibility of Israel attacking Iran heightened already simmering tensions in the region, while caution set in ahead of key US jobs data.
Worries about an attack helped oil buck a trend across broader markets. Asian shares and the euro weakened as participants awaited for more clues over the state of the world’s largest economy, while talks to restructure Greece’s debt dragged on.
Front-month Brent crude gained 33 cents to $112.40 a barrel by 08:15 am, gaining for a fourth straight day. US crude gained 15 cents to $96.51 a barrel, reversing five straight sessions of losses.
“The oil market is getting driven on a headline by headline basis coming out of the Middle East,” Ben Le Brun, market analyst at OptionsXpress said in a report. “Investors are fearing the worst out of the Middle East.”
US Defense Secretary Leon Panetta believes there is a growing possibility Israel will attack as early as April to stop Tehran from building a nuclear bomb, US media reported.
The Washington Post first reported that Panetta was concerned about the increased likelihood Israel would launch an attack over the next few months. CNN said it confirmed the report, citing a senior Obama administration official, who declined to be identified.
Markets are also focused on US employment data due later in the day for more trading cues.
Nonfarm payrolls rose 150,000 in January after increasing 200,000 in December, according to a Reuters survey. The unemployment rate is seen holding steady at a near three-year low of 8.5%.
While job growth has quickened, employment remains about 6.1 million below its pre-recession level. There are no jobs for three out of every four unemployed people and 23.7 million Americans are either out of work or underemployed.
“Financial markets are operating in a ‘holding pattern´ ahead of what is the economic equivalent of the Super Bowl, that being US employment figures,” Tim Waterer, senior FX dealer at CMC Markets, said in a report.
“A healthy US jobs result would serve to justify the optimism displayed in financial markets thus far in 2012.”
New claims for unemployment benefits in the United States fell more than expected last week, pointing to further healing in the nation’s battered jobs market.
Jobless claims have zig-zagged in the last few weeks, but the trend - reinforced by the latest drop - suggests employers have grown less eager to lay off workers, offering hope they could also step up hiring.