Oil rose slightly on Friday as the dollar slumped following bleak employment data in the United States, the world's top energy consumer. US crude settled up 27 cents to $61.04 a barrel off earlier highs of $62.82 a barrel. London Brent crude for December settled down 8 cents at $57.35 a barrel.
Despite Friday's gains, prices are down nearly ten percent this week, having fallen $6.77. Oil prices have dived nearly 60 percent from record highs of over $147 dollars per barrel in July, as the global economic crisis has hit the wider economy, shrinking demand in major consumer nations.
The US dollar on Friday eased against a basket of currencies after government data showed US employers cut payrolls by 240,000 in October. In addition, data showed September registered the biggest monthly loss in jobs in nearly seven years. The Labour Department said the US unemployment rate shot up to 6.5 percent from 6.1 percent in September, the highest since March 1994. Wall Street economists had previously estimated that 200,000 US jobs had been lost in October.
"Crude oil futures, like the stock market, are hanging in there. People came in today amid worries that the jobless data would crush the markets, but they haven't," said Andy Lebow, broker at MF Global, New York. "But despite that, the data looks pretty downbeat. The crude oil market has to look at the fact that we're losing jobs and that ultimately will have an impact on petroleum demand."
In New York, the ICE Futures' dollar index, a measure of the greenback's value against a basket of six currencies, traded around 0.1 percent lower this afternoon. A weaker dollar makes oil cheaper for holders of other currencies and tends to support prices. "Seems like the weaker dollar is what gave us the bounce," said Tom Bentz, analyst at BNP Paribas Commodity Futures Inc. However, the dollar's retreat was offset by a rise in stocks on Friday as investors bought beaten-down sectors.
US automakers General Motors Corp and Ford Motor Co reported billions in losses on Friday, far deeper than expected, as car sales slumped with consumers tightening belts in the face of what analysts are now calling a serious recession. Oil's tumble from July highs has already spurred Opec to rein in supply from November 1, and some members of the cartel are talking of reducing production further.
Venezuela's oil minister Rafael Ramirez has said Opec should act again. "We say (a new cut should be) at least a million," he told Reuters on Thursday. But Shokri Ghanem, Libya's top oil official, said the group was not actively considering cutting output again. Opec is due to meet next on December 17.
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