Crude Oil Gains a Fourth Day on U.S. Jobs Growth, European Crisis Pledge

By Ben Sharples - Oct 10, 2011 6:36 AM GMT+0700

Oil climbed for a fourth day in New York as investors bet that fuel demand may increase on signs of an economic recovery in the U.S. and a pledge by Europe to contain its sovereign-debt crisis.

Futures gained as much as 0.5 percent, after the biggest weekly gain in seven months. U.S. employers added more workers in September than forecast, a report showed Oct. 7. German Chancellor Angela Merkel said yesterday that European leaders will do “everything necessary” to ensure that banks have adequate capital. OPEC members are likely to keep their output target for oil unchanged when they meet in December, according to Iran’s representative.

“Better-than-expected U.S. data boosted the outlook for the broader economy and oil demand,” James McIntyre, an economist at Commonwealth Bank of Australia, said in a note.

Crude for November delivery advanced as much as 37 cents to $83.35 a barrel in electronic trading on the New York Mercantile Exchange and was at $83.29 at 10:32 a.m. Sydney time. The contract on Oct. 7 rose 39 cents to $82.98, for a weekly gain of 4.8 percent, the biggest since the week ended March 4. Prices are down 9 percent this year.

Brent oil for November settled was at $106.05 a barrel, up 17 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $22.76 to New York crude, compared with a record of $26.87 on Sept. 6.

U.S. payrolls increased by 103,000 after a revised 57,000 gain in August, the Labor Department said Oct. 7. The median forecast in a Bloomberg News survey of economists called for an increase of 60,000. The jobless rate held at 9.1 percent.

Three Weeks

Merkel and French President Nicolas Sarkozy have given themselves three weeks to devise a plan to recapitalize banks, get Greece on the right track and fix Europe’s economic governance, they told reporters in Berlin.

Oil producers and consumers are satisfied with the current price level for crude, Iran’s Governor to the Organization of Petroleum Exporting Countries, Mohammad Ali Khatibi said, according to Shana, the Iranian Oil Ministry’s news website. OPEC is responsible for 40 percent of global oil output.

Hedge funds cut bullish bets on oil for a third week as concern that slowing economic growth will reduce fuel demand. The funds and other large speculators reduced wagers on rising prices by 5.5 percent in the week ended Oct. 4 to the lowest level since Aug. 23, according to the Commodity Futures Trading Commission’s Commitments of Traders report on Oct. 7.

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

To contact the editor responsible for this story: Paul Gordon in Hong Kong at pgordon6@bloomberg.net