NEW YORK—Crude futures added to last week's rally, as the market opened for the first time since Friday's report of the biggest increase in U.S. employment in three years.
Light, sweet crude for May delivery traded $1, or 1.2%, higher at $85.87 a barrel on the New York Mercantile Exchange, with the day's intraday peak of $85.97 the highest since October 2008. Brent crude on the ICE futures exchange traded 93 cents, or 1.1%, higher at $84.94 a barrel.
The move represented a delayed reaction to Friday's news of of a 162,000 gain in U.S. nonfarm payrolls in March. Most markets, including oil, were closed that day for Good Friday, meaning that this is the first day for investors to react to the data.
Although the number of new jobs came in below the economists' consensus forecast, any decline in unemployment is welcome news after months of improving economic conditions without job creation. Lower unemployment also helps demand for gasoline by increasing the number of commuters.
With the jobs picture finally appearing to improve, oil's recent gains may have more staying power. Prices have topped $83 a barrel several times this year, only to quickly fall back as investors worried that futures had risen faster than the gradual economic recovery warranted.
"You had a breakthrough...the economy is trying to mend itself and that caused the market to break through these resistance areas," said Tony Rosado, a broker with GA Global Markets. Oil at "$88 is just around the corner."
Oil prices rose 5.7% in last week's shortened week, largely on signs that economic activity in Asia remains strong. Traders have largely tied their outlook—and $80 a barrel crude—to a rapid increase in demand in China and other developing economies, as the U.S. recovery has been slow to gain momentum.
Friday's jobs report likely doesn't change that dynamic, as U.S. demand is still expected to see anemic growth this year.
"This expected oil demand improvement during the second half of this year can be a powerful driving force regardless if it is actually realized or not," wrote Jim Ritterbusch, president of the trading advisory firm Ritterbusch and Assoc. in Galena, Ill.
Front-month May reformulated gasoline blendstock, or RBOB, recently traded 2.11 cents, or 0.9%, higher at $2.3448 a gallon. May heating oil traded 2.84 cents, or 1.3%, higher at $2.2451 a gallon.
