Oil rises above $77 as US job fall shrinks

London: Oil turned positive and rose above $77 (Dh282.5) yesterday as closely watched US data showed the smallest job loss figure since December 2007.

US crude futures rose 65 cents to $77.09 at 1411 GMT, reversing an early drop to as low as $75.57. Brent crude rose 79 cents to $79.15.

US employers cut 11,000 jobs in November, the smallest figure since the start of the recession in December 2007, government data showed yesterday.

The figure was also much fewer than the expected 130,000 job losses.

The data pushed the dollar up against the yen and modestly higher versus the euro.

Still, the unemployment rate remained high, capping gains in oil prices. The rate was 10 per cent in November, compared with 10.2 per cent in October.

Inventory levels

The US economy, the world's biggest energy consumer, has come out of recession but unemployment is lagging and has yet to turn.

Olivier Jakob with Petromatrix said that high oil inventory levels in the United States, especially at the delivery point of US crude at Cushing, Oklahoma, have been putting more pressure on US oil prices than on North Sea benchmark Brent crude.

Oversupply and the fragile state of the global economy will be among the issues for the Organisation of Petroleum Exporting Countries (Opec) when it meets on December 22. Analysts expect no change in its output policy.

Opec's Secretary-General Abdullah Al Badri said on Thursday the group should be cautious as it needs to balance signs of economic recovery and abundant supplies.

In terms of prices, the current band of $70-$80 is satisfactory, Saudi Arabian Oil Minister Ali Al Naimi told reporters in Cairo.