Crude-oil futures rose 1.7% Friday to a one-month high as monthly jobs data showed hiring picked up in April, offering a hopeful sign for the broader economy.
The U.S. added 165,000 jobs last month, according to the Labor Department, above economists' average estimate of a 148,000 increase. The unemployment rate fell to 7.5% from 7.6%.
For energy traders, the jobs report boosted expectations that demand for gasoline and other fuels will start to pick up as the economy improves.
"With stronger jobs numbers, oil demand should be on its way," said Carl Larry, head of oil-trading newsletter Oil Outlooks and Opinions.
U.S. oil stockpiles rose to the highest level in at least three decades last week, while gasoline supplies in the high-demand Northeast U.S. are 11% above average for this time of year. If the economy picks up steam, those high levels of supplies could begin to fall.
"This puts us back on track for a much stronger economy, and in terms of energy demand, it bodes well for gasoline," said John Kilduff, founding partner of New York hedge fund Again Capital. "No matter how expensive gasoline gets, people will pay for it to drive to their job."
Light, sweet crude for June delivery settled $1.62 higher at $95.61 a barrel on the New York Mercantile Exchange, after trading as high as $96.04 a barrel earlier in the session.
Brent crude on the ICE Futures Exchange was $1.34 higher at $104.19 a barrel.
Nymex gasoline futures for June delivery settled 4.48 cents, or 1.6%, higher at $2.8254 a gallon.
The gains in oil follow a sharp rally in the previous session, when Nymex crude futures jumped 3.3%, reversing losses from earlier in the week.
Broader markets also moved higher following the jobs data, with the Dow Jones Industrial Average recently up 0.9%. Copper futures surged 6.8% to $3.3145 a pound.
Both Nymex crude and its European counterpart, Brent, have been sensitive this week to economic indicators, including disappointing data on the U.S. and Chinese economies. But on Thursday, the European Central Bank's decision to cut interest rates prompted a rally in equity markets that spilled over into the crude-oil market.
But despite Friday's gains, many analysts and traders say that the oil market remains well-supplied, which could cap any sustained price gains. And higher stockpiles in the U.S., due in part to surging domestic production, come as some overseas producers are keeping output strong.
The presidents of Sudan and South Sudan will be in place to watch the first shipment of crude oil from the south through Sudan's Port Sudan in the next few days, after a more than 15-month halt kept the countries' 350,000 barrels a day of production off the market.
Copyright (c) 2012 Dow Jones & Company, Inc.
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