Oil prices extended gains today following a strong two-day run after today’s non-farm payrolls report revealed that the US economy added double the expected number of jobs last month, suggesting that the US economy is in better shape than thought.
The data from the Department of Labor revealed an increase of 103,000 in payrolls for September, while analysts polled by Bloomberg expected to see a gain of 59,000.
Equity and commodity markets rallied on the update with US benchmark crude reaching US$84 per barrel, up US$6 from Tuesday's close.
The surge in oil prices started on Wednesday when official data from the US government revealed a massive drop of 4.7 million barrels in US crude stockpiles for the previous week, a sign that energy demand in the US was on the rise.
In addition to that, oil prices benefitted from weakness in the US dollar, which dropped after today’s upbeat jobs report reduced demand for safe haven assets, including the greenback.
The decline in the US dollar made the dollar-denominated crude cheaper for holders of other currencies, lifting demand.
US light, sweet crude for November delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), rose 80 cents to US$83.39/barrel in morning trade in New York.
November Brent crude added 19 cents to reach US$105.94/barrel on the ICE Exchange this afternoon.
Today’s top risers in the oil and gas sector were:
Petroceltic International (LON:PCI), up 14 percent at 5.17 pence at midday
Tower Resources (LON:TRP), up 11.5 percent at 3.31 pence
Forum Energy (LON:FEP), up 9 percent at 49.5 pence
Amerisur Resources (LON:AMER), up 8.5 percent at 11.12 pence
Oilex (LON:OEX), up 8.5 percent at 14.35 pence
The top fallers were:
Woburn Energy (LON:WBN), down 11 percent at 1 pence at midday
Urals Energy (LON:UEN), down 5.5 percent at 6.6 pence
Gasol (LON:GAS), down 5.5 percent at 0.556 pence
San Leon Energy (LON:SLE), down 5 percent at 14.75 pence
Global Petroleum (LON:GBP), down 4 percent at 12 pence
Oil prices extend gains after non-farm payrolls
Published: 15:42 07 Oct 2011 BST