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Oil prices rise on stimulus hopes

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Oil prices rose today after weak US employment data boosted speculation that the Federal Reserve could take more stimulus action at its upcoming policy meeting.

The Department of Labor said the US economy added 96,000 jobs last month, while expectations were for a gain of well over 100,000 after payrolls processor ADP said the private sector created 201,000 jobs in August.

A poll by Bloomberg News projected an increase of 130,000 in non-farm payrolls.

Additionally, the Labor Department lowered its estimate for July to 141,000 from 163,000.

On a positive note, the unemployment rate unexpectedly declined to 8.1 percent from 8.3 percent.

At last week’s symposium in Jackson Hole, Federal Reserve chairman Ben Bernanke said the central bank was ready to act to bolster the economic recovery.

Some Fed officials backed an unlimited quantitative easing programme, which could be maintained until conditions in the job market improve significantly.

The European Central Bank (ECB) yesterday launched an unlimited bond-buying programme, aiming to bring down borrowing costs of debt-laden euro zone members such as Italy and Spain.

Bond yields fell sharply, which equities and commodities rallied after the ECB disclosed the details of its bond-buying plan, which will see the bank acquire securities maturing within three years.

US light, sweet crude for October delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), rose 30 cents to US$95.83/barrel this afternoon.

October Brent crude tacked on 64 cents to reach US$114.13/barrel on the ICE Exchange.

Today’s top risers in the oil and gas sector were:

Madagascar Oil (LON:MOIL), up 14.5 percent at 25.75 pence at midday

Nostra Terra Oil & Gas (LON:NTOG), up 6.5 percent at 0.404 pence

Rockhopper Exploration (LON:RKH), up 5.5 percent at 185.25 pence

Max Petroleum (LON:MXP), up 4.5 percent at 4.14 pence

Circle Oil (LON:COP), up 4 percent at 21.75 pence

The top fallers were:

Lochard Energy (LON:LHD), down 6.5 percent at 6.55 pence at midday

Matra Petroleum (LON:MTA), down 5.5 percent at 1.6 pence

Northern Petroleum (LON:NOP), down 3 percent at 65 pence

Tower Resources (LON:TRP), down 3 percent at 3.3 pence

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