Crude oil increased for a third day in New York after larger-than-forecast U.S. employment growth eased concern that the economy is slowing. Futures rose as much as 1.7 percent as the Labor Department said payrolls climbed by 103,000 workers in September and 57,000 in August. The median forecast in a Bloomberg News survey called for a gain of 60,000 in September. Oil is headed for the first weekly advance in three as supplies fell and central banks announced stimulus plans. “There have been some really grave concerns that we’re heading into another recession and this will quell those worries until the next bad numbers come out,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $1.3 billion. “We were already having a really good week and these numbers were better than expected.” Crude oil for November delivery rose 76 cents, or 0.9 percent, to $83.35 a barrel at 10:05 a.m. on the New York Mercantile Exchange. The contract is heading for a 5.2 percent gain this week. Futures dropped as much as 1 percent to $81.79 before the release of the jobs data at 8:30 a.m. in Washington. Brent oil for November settlement gained 9 cents to $105.82 a barrel on the London-based ICE Futures Europe exchange. The employment gain included the return to work of 45,000 striking telecommunications employees. The jobless rate held at 9.1 percent. Hours and earnings both increased, the report showed, and revisions to previous reports added a total of 99,000 jobs to payrolls in July and August. ‘The Biggest Driver’ “The biggest driver of oil markets is economic growth,” said Jason Schenker, the president of Prestige Economics, an energy advisory company in Austin, Texas. “People were increasingly fretful that we were entering another recession, and here is a piece of economic news that points to growth.” Industrial output in Germany, Europe’s largest economy, fell less than forecast in August. Production dropped 1 percent from July, when it rose 3.9 percent, the Economy Ministry in Berlin said today. A 2 percent decline was expected, according to the median of 35 estimates in a Bloomberg News survey. Output is up 7.7 percent this year when adjusted for working days. The European Central Bank said yesterday it will bring back yearlong loans, giving banks access to unlimited cash through January 2013. The ECB will also resume purchases of covered bonds to encourage lending. The Bank of England announced yesterday its biggest stimulus since the recession. U.S. crude oil inventories fell 4.68 million barrels to 336.3 million last week, the lowest level since January, according to an Energy Department report on Oct. 5. Gasoline supplies declined 1.14 million barrels to 213.7 million last week, the report showed. “The big draw in supplies this week gave the market a boost,” Schenker said. “At the end of the day this is about supply and demand.” To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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