IV:Crude oil hits 5-week high on U.S. demand hopes, Middle East tension
Investing.com - Crude oil futures extended gains from the previous session to hit a five-week high on Monday, after stronger-than-expected U.S. non-farm payrolls data boosted hopes for an increase in demand from the world's largest oil consumer.
Prices also drew support from fresh fears over a disruption to supplies from the Middle East amid growing tensions between Israel and Syria.
On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded at USD96.17 a barrel during European morning trade, up 0.6% on the day.
New York-traded oil prices rose by as much as 1.5% earlier in the session to hit a daily high of USD97.13 a barrel, the strongest level April 2.
Nymex prices rose 1.6% on Friday after the U.S. Department of Labor said the economy added 165,000 jobs in April, above expectations for an increase of 145,000, while job increases for the previous month were revised up to 138,000.
The U.S. unemployment rate unexpectedly fell to a four-month low of 7.5% from 7.6% in March.
Oil traders have long been taking cues from the monthly jobs report, the most-closely followed indicator of U.S. employment. The U.S. is the world’s biggest oil consuming country, responsible for almost 22% of global oil demand.
Meanwhile, crude prices drew support from mounting geopolitical tensions in the Middle East after Syria’s state news agency said the Israeli air force attacked a military research center on the outskirts of Damascus on Sunday.
The news sparked fears that unrest will spread throughout the region and disrupt supply. The Middle East accounted for 33% of global crude output in 2011.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for June delivery added 0.25% to trade at USD104.46 a barrel, with the spread between the Brent and crude contracts standing at USD8.29 a barrel, the lowest level since December 2011.
The gap between the contracts has narrowed sharply in recent weeks, amid an improving production outlook in the North Sea and indications of declining stockpiles at Cushing, Oklahoma, the delivery point for Nymex oil futures.
