Oil prices rose to near $ 89 a barrel on Friday in Asia as traders looked to an important monthly employment report for signs the US economy is strengthening.
Benchmark oil for February delivery rose 47 cents to $ 88.85 a barrel midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract lost $ 1.92 to settle at $ 88.38 on Thursday.
Investors will be closely watching the December non-farm payroll figures scheduled to be released later today after mixed signals about the jobs market so far this week.
The Labour Department said on Thursday that 409,000 people made claims for benefits for the first time, up 18,000 from the previous week. However, the ADP said Wednesday that companies likely added nearly 300,000 jobs last month, far more than the 100,000 economists predicted.
Economists expect the unemployment rate fell to 9.7 per cent in December from 9.8 per cent the previous month.
“Friday’s employment figures are likely to set new waves in motion,” Cameron Hanover said in a report.
“If we see an increase in jobs for December, (oil traders) will imagine drivers filling up at pumps around the nation.”
Most analysts have forecast oil prices will pierce the $ 100 level this year, but others expect global economic growth to weaken in 2011, dragging on crude demand.
“World GDP growth is likely to be slower in 2011 as a whole than in 2010, and slower still in 2012,” Capital Economics said in a report. “This, along with warmer weather and increases in OPEC as well as non-OPEC supply, should pull oil prices down again“.
In other Nymex trading in February contracts, heating oil gained 0.7 cent to $ 2.52 a gallon while gasoline futures added 0.8 cent to $ 2.45 per gallon. February natural gas futures slid 2.3 cents to $ 4.41 per 1,000 cubic feet.
In London, Brent crude was down 55 cents to $ 93.97 a barrel on the ICE Futures exchange.