London: Oil rose toward $78 a barrel on Friday, trimming an 11% loss from a 19-month high hit earlier this week, as international leaders prepared to meet to try to contain Greece’s debt crisis.
Some support came from an expected improvement in jobs data later in the day from top oil consumer the US, analysts said.
US crude oil futures rose 84 cents to $77.95 a barrel by 4:28pm, London Brent crude rose 68 cents to $80.51 a barrel.
“The oil market is going to be traded based on economic inputs. Today US jobs data is expected to show some improvement,” Olivier Jakob with Petromatrix said.
US jobs figures to be released at 6:00pm are likely to show 200,000 jobs were added in April, up from 162,000 in March.
The Group of Seven finance ministers said they would discuss the Greek bailout later on Friday after Federal Reserve officials expressed concern. The Whitehouse said President Barack Obama was watching developments closely.
Euro zone leaders also meet later in the day in a special summit, while Germany’s parliament is to vote on the €110 billion ($140 billion) bailout later in the day.
Actual oil demand so far has not recovered from last year’s fall strongly enough to drive prices higher and concern over the Greek debt crisis would haunt the global market, Jakob said.
“All markets are down this week on concerns over Greece and Europe. If the whole of the euro zone goes into trouble, it may somehow offset potential growth in the United States and Asia, which will be negative input to oil prices,” Jakob said.
Oil has fallen from above $87 hit on Monday, the highest since October 2008, due to concerns that the Greek crisis might spill over to other countries such as Spain and Portugal, putting the whole euro zone economy in trouble.
Global equity markets have also fallen this week, while market volatility index and gold have risen.
The National Australia Bank pointed out that US official weekly oil data had shown a rise in refinery run rates, which may not necessarily be driven by strong demand in the United States but a potential increase in fuel inventories.
“While this reflects refiners responding to higher margins or expectations of future consumption, there appears to have been little pickup in demand for oil products,” the bank said in a research note.
“Consequently, the effect of increasing refinery activity has been to transfer oil inventories from crude to oil products, giving a false indication of an improvement in fundamental conditions in the US.”