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Brent above $112 on Greece; US jobs data eyed

Brent above $112 on Greece; US jobs data eyed
AP
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First Published: Fri, Nov 04 2011. 03 26 PM IST

Updated: Fri, Nov 04 2011. 03 26 PM IST
Singapore: Oil prices hovered below $94 a barrel Friday in Asia amid signs the US economy may be improving.
Benchmark crude for December delivery was up 5 cents at $94.12 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.56 to settle at $94.07 in New York on Thursday.
Brent crude was down 33 cents at $110.50 a barrel on the ICE Futures Exchange in London. Crude has jumped about 25 percent from $75 on 4 October amid growing investor optimism that the US economy will avoid a recession.
On Thursday, the Labor Department reported that the number of people who applied for unemployment benefits dipped slightly last week to the lowest level in five weeks. And the Commerce Department said factory orders had the biggest jump in six months in September.
By
* Brent surges above $112 a bbl
* Expectations Greece bailout referendum is off
* Coming Up: Oct U.S. non-farm payrolls; 1230 GMT (Updates throughout, adds comments, previously SINGAPORE)
By Zaida Espana
LONDON, Nov 4 (Reuters) - Brent crude extending gains for a second day on Friday to rise above $112 a barrel as hopes Greece might revoke its plans to hold the European Union bailout to referendum eased worries about a disorderly default.
Brent crude futures <LCOc1> surged in European trade, up by $1.19 a barrel to $112.02 a barrel by 0842 GMT, after surging on Thursday on the back of a surprise interest rate cut by the ECB.
U.S. light crude futures <CLc1> were 71 cents firmer at $94.78 a barrel by the same time, reversing early losses and rising for a third day.
Investors remained jittery however, with Greece’s prime minister George Papandreou agreeing to step down in exchange for support from his cabinet to avoid a referendum on EU aid.
“Prices are consolidating yesterday’s gains, although today there are some uncertainties: the confidence vote in the Greek parliament, what happens if Papandreou loses it and what happens to the next tranche disboursement if there is a negative outcome,” said Commerzbank’s Carsten Fritsch. “All this may keep a lid on prices”.
The European Brent crude benchmark has slipped more than 13 percent from its peak this year as the outlook for growth in industrialised nations worsened, but the supply disruption in Libya and Chinese demand should put a floor under prices.
The contract’s popularity has increased, with the S&P GSCI , the most widely tracked commodity index, announcing it will boost its Brent crude oil weighting next year and cut the share of U.S. WTI crude.
Oil investors waited for U.S. employment data scheduled for later in the day to assess the economic outlook of the world’s top oil consumer.
U.S. employment growth in October may have been strong enough to suggest some economic momentum is building, though it may be too weak to pull down the nation’s lofty jobless rate. Nonfarm payrolls likely rose 95,000 last month, according to a Reuters survey, after expanding by 103,000 in September. (Additional reporting by Manash Goswami and Jane Lee in Singapore)
REUTERS
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First Published: Fri, Nov 04 2011. 03 26 PM IST
More Topics: Markets | Commodity | Oil | Brent | Crude |