Perth: Oil rose slightly on Friday, supported by positive US economic data, but wariness ahead of monthly jobs data from the United States limited gains and kept its price below the psychologically key $80 level.
Despite data showing jobless claims in the US fell to a 10-month low last week and non-farm productivity rose at its fastest pace in six years in the third-quarter, oil prices fell nearly 1% on Thursday as high fuel inventories in the United States raised worries about a recovery in oil demand.
US crude for December delivery crept up 12 cents to $79.74 a barrel by 0025 GMT, after shedding 78 cents to settle at $79.62 on Thursday.
London Brent crude rose 31 cents to $78.30.
The labour market is being closely watched as analysts try to gauge the strength and durability of a government stimulus-driven recovery that started in the third quarter and probably ended the worst US recession since the 1930s.
“There’s not much news in the market. Traders are still looking to the US unemployment report for directions,” said Clarence Chu, a trader at Hudson Capital Energy in Singapore.
US employers in October are expected to have cut payrolls by the smallest amount in 14 months as the economy’s resumption of growth boosted optimism, but the jobless rate still rose to a fresh 26-year high of 9.9% in October, a Reuters survey predicts.
A higher-than-expected jobless rate or a bigger loss of jobs than forecast could rattle investors on Wall Street and the energy complex, and send them fleeing into the safe haven of US government bonds and the US dollar.
Oil prices are set to gain 3.8% this week, clawing back some of the previous week’s 4.4% losses, thanks to a series of solid economic data that have helped investors regain some confidence about the pace of the economic recovery.
However, analysts said most of the economic optimism has already been priced in and persistently sluggish energy demand in the United States, the world’s largest energy consumer, could limit oil’s gains.
Weekly inventory data on Wednesday showed that US distillate stocks -- often taken as a more faithful snapshot of demand than crude oil -- fell 400,000 barrels compared to analyst expectations for a 1 million-barrel decline. They remain near 26-year highs and analysts said this would cap price rises in the event of a cold winter.
“The deluge of global liquidity has contributed to lifting oil prices since February. With the end of easing approaching, we envision a harder grind ahead -- one where fundamentals will matter more,” Morgan Stanley said on Friday in a research note led by energy analyst Hussein Allidina.
“We think upside in crude will be rather limited as supportive macro factors start to fade and physical markets remain weak.”
Separately, the US dollar held steady on Friday with investors consolidating positions ahead of October non-farm payrolls data due later in the session.